Fennovoima’s Finnish shareholders consist 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 2016
Fennovoima had no turnover in 2016. The reason is that the company is still in the project phase and does not own any revenue-generating assets yet. The construction of the actual plant will begin as soon as the site is prepared and the Construction License is granted by the Government of Finland. 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 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 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 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.