Responsibility Report 2017

Economic profitability

Economic responsibility means us creating long-term value for the shareholders and having a positive economic impact on Finnish society.

Our practices

Fennovoima contributes to maximizing the positive impact of the project in many ways and has set the related goal: the Hanhikivi 1 Program will have a significant positive contribution to the site region and the country as a whole.

Key financial figures

Fennovoima has one major task, which is to build a new nuclear power plant in Finland and to produce electricity at a stable price for its shareholders.

Fennovoima’s Finnish shareholders consist mainly of industrial companies and municipal energy companies that utilize energy in their own operations. Fennovoima’s Hanhikivi 1 project will benefit the whole of Finland due to the increased carbon-free electricity supply.

Fennovoima will be operating on the cost-price principle (the “Mankala principle”), whereby the shareholders are entitled to the electricity generated by the nuclear power plant at cost price in proportion to their ownership in the company. As a result of this principle, Fennovoima will not make a profit nor pay dividends in the normal course of its business.

Fennovoima has offices in Helsinki and Pyhäjoki. The headquarters is in Helsinki. Fennovoima Oy has a 100%-owned subsidiary, OOO Fennovoima Rus, in Russia. The subsidiary was registered in November 2015 to control procurement in Russia. OOO Fennovoima Rus has an office in St. Petersburg, Russia.

Financial year 2017

Fennovoima had no turnover in 2017. The reason is that the company is still in the project phase. The construction of the actual plant will begin as soon as the project site is prepared and the Construction License is granted by the Government of Finland. According to the plant supplier, the construction and commissioning of Hanhikivi 1 is planned to be completed by 2024, after which the plant will be in commercial use.

As a result, all the costs of Fennovoima basically relate to the design, construction and commissioning of this nuclear power plant. The distribution of economic value is described in the following figure.

As there are no revenues expected before the plant begins commercial operations:

The economic value generated (a) remains at a modest level, consisting mainly of occasional financing income related to the loan facilities and liquidity management.

The economic value distributed (b) is naturally considerable prior to commercial operations, because the whole power plant investment is spent during this period. Fennovoima is not yet able to generate revenues nor economic value that it could distribute as a typical enterprise. Instead, the company distributes the invested capital to various stakeholders: its own personnel, external services, authorities, EPC (engineering, procurement and construction) contractors, etc. which contributes to the completion of the power plant.

As a result, the economic value retained (a - b) is currently negative. After the plant starts commercial operations, the economic value generated is going to cover the economic value distributed. However, due to the Mankala principle applied by the company, the economic value retained is expected to be close to zero, even during commercial operations.


Hanhikivi 1 project has a significant positive contribution to the site region and on national level

The Hanhikivi 1 Program is a significant domestic investment, which will have an effect on the whole of Finland and its economy. The investments related to the project will increase employment, particularly in the construction industry. 

The building of new nuclear power also generates significant additional investments, not only within the energy sector and construction, but also in capital-goods-producing industries. The additional income that is created by the investments will increase the purchasing power of households and stimulate consumer demand. 

According to our surveys and discussions with local residents, the effects of the Hanhikivi 1 project are already visible in the area as Pyhäjoki has become a more lively living environment, construction activities have burgeoned and there are more job opportunities available than before.

Improving the capabilities of local actors

The Hanhikivi 1 project has a significant social dimension as the large construction project sets requirements also for the area. Fennovoima has sought to work closely with private and third sector actors right from the early stages of the project.

Fennovoima participates in the work of collaboration projects that focus on improving the capabilities of the local actors to prepare for the Hanhikivi 1 project.

The main objective of these preparations is to maximize the positive impact of the Hanhikivi 1 project on the region and increase the attractiveness of the region as well as creating prerequisites for capacity-building. The area’s ability to support and adapt to the requirements that the project sets for the area is important for the fluent realization of the Hanhikivi 1 project.

Business support

We are actively encouraging Finnish companies to take part in the Hanhikivi 1 project and providing related information through various events and forums that are organized in the plant site region or other parts of Finland. In addition, Pyhäjoki municipality itself along with business associations and business development organizations are providing information about the employment and contracting opportunities at the Hanhikivi 1 construction site. We are also helping the plant supplier RAOS Project and the main contractor Titan-2 to collaborate with Finnish companies.

Fennovoima provides the Finnish business sector with information concerning the project and the related contracts, procurement procedures and requirements at info and networking events organized by FinNuclear at national level and locally by municipalities and business services. The abilities of Finnish companies to successfully participate in the bidding process are enhanced by coaching. Fennovoima participates in the design and implementation of the training provided by FinNuclear.

Regional breakdown of the Finnish companies in the site register.

Site register 2017 2016
Companies    
Total number of companies 486 345
Registered in Finland 454 (93%) 329 (95%)
People    
Total number of people 2299 1523
Finns 2017 (88%) 1498 (98%)

The share of the Finnish companies and people in the site register.
The number of people working at the site has doubled since last year.
Approximately 300 people have been working at the site on a daily basis.