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Areva's Finnish client stands ground over French restructuring plans
January 26, 2016 / 2:13 PM / 2 years ago

Areva's Finnish client stands ground over French restructuring plans

HELSINKI (Reuters) - Finland’s TVO, owner of the delayed Olkiluoto 3 nuclear reactor, said it is opposed to any restructuring of French plant builder Areva AREVA.PA that does not include liabilities stemming from the project, which is running nine years late and billions of euros over budget.

The unfinished Olkiluoto-3 nuclear reactor in Eurajoki, Finland, is seen in this general view taken January 21, 2015. REUTERS/Jussi Rosendahl

France’s state-controlled power company EDF (EDF.PA) is expected to outline a plan to take over Areva’s crisis-hit reactor division on Wednesday. EDF does not want to take on liabilities linked to Olkiluoto.

The project, which Areva is leading in a consortium with Siemens (SIEGn.DE), has descended into acrimony, with the French company and client TVO claiming billions of euros in damages from one another.

France’s Les Echos newspaper reported this month that the Areva acquisition could see the Olkiluoto contract, known as OL3, transferred to another legal entity.

TVO Chairman Lauri Virkkunen said that would separate the contract to build the plant from the funds needed to complete it.

“If the structure becomes more complicated, that creates new challenges for the completion of the project,” Virkkunen told Reuters.

“This is, roughly speaking, a 100-year marriage that requires confidence and from which you can’t get a divorce,” he said. “It is important that both parties understand this and act so that confidence remains and improves.”

French Economy Minister Emmanuel Macron said last week that Areva and TVO would try to settle their rival claims within a month.

Virkkunen said TVO wanted to get the plant online as soon as possible, even though power prices in the Nordic region had weakened. Originally planned to open in 2009, the reactor in western Finland is now expected to begin operations in 2018.

“We are committed to this project, it causes more costs for us as we speak and generates no income. We definitely want this plant in use quickly,” he said. “We don’t know which solutions are possible... We would like TVO to be part of the solution.”

TVO blames the delays on insufficient planning and execution by the supplier consortium. Areva argues that TVO’s inflexibility was partly to blame.

TVO’s owners include utility Fortum FUM1V.HE and paper companies UPM UPM1V.HE and Stora Enso (STERV.HE).

Additional reporting by Geert De Clercq; editing by Jason Neely

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