Fortum says talks with Russian firms over Fennovoima stall

By Reuters

Jun 24, 2015 08:17 AM EDT

Finnish utility Fortum (FUM1V.HE) said on Wednesday it has failed so far to reach a deal with Russia's Gazprom (GAZP.MM) and Rosatom on assets swap in Russia to allow it to take stakes in Fennovoima nuclear power plant project.

Fortum agreed last December to take up to 15 percent stake in the planned nuclear plant in northern Finland, supplied and fueled by Russia's Rosatom, in exchange for hydro power assets of TGC-1 (TGKA.MM), a Russian hydro and thermal company.

The plan was to move TGC-1's hydro assets into a new company to be 75 percent-owned by Fortum and 25 percent by state-owned Rosatom.

"The negotiations have not, however, come to a conclusion that would make it possible for Fortum to decide on its participation in the Fennovoima nuclear power project," Fortum said in a statement.

Fortum said it was still ready to take up to 15 percent in the project if it received majority ownership in TGC-1 hydro assets, but it was not possible to estimate how long negotiations would take.

The deadline for Fennovoima to apply for a construction permit for the 1,200 megawatt plant in Pyhajoki is June 30.

The Finnish parliament agreed in December to allow Russia's state-owned Rosatom to take a 34 percent stake in Fennovoima, but required that 60 percent should be Finnish or EU-owned.

Elina Engman, head of Fennovoima's Finnish owners' consortium, said this month that the consortium was also having conversations with other potential investors to meet the 60 percent target.

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