Rosatom, Russia’s state nuclear energy corporation, is insisting on compensation of Rbs227.8 billion. This is a loss of around $2.8 billion from the cancellation of its contract for the construction of the Hanhikivi-1 nuclear power plant project in Finland. The lawsuit was originally filed after Fennovoima, a Finnish consortium that includes Outokumpu and Fortum, canceled the contract in May 2022. This seemingly benign action led to multiple conflicts. The consortium pointed to bad delays as the key culprit behind the cancellation. They cited geopolitical risks, most notably from Russia’s military aggression in Ukraine.
Unlike other nuclear projects around the world, the Hanhikivi-1 project launched bright and early in 2013. Its objective? To construct a large, 1.2 gigawatt nuclear power plant, with an overall commitment of €6.5–7 billion, or about $7.3–7.9 billion. Following the termination of the contract, Fennovoima brought international arbitration to recover €1.7 billion in advance payments paid so far to Rosatom. In reply, the Russian state corporation filed counterclaims of €3 billion against Fennovoima.
Alongside these lawsuits, Rosatom has launched international arbitration proceedings against minority owners Fortum and Outokumpu. The lawsuit, which was filed in Moscow, cites “unlawful termination” of the construction contract and other agreements. This legal action highlights the operational difficulties that international energy projects face in today’s rapidly changing geopolitical landscape.
Additionally, in an interesting parallel development abroad, Rosatom pushes its own nuclear ambitions abroad. The corporation began installing the inner containment structure for the reactor building of Unit 2 at the El-Dabaa NPP in Egypt last September. With this latest announcement, Rosatom has demonstrated its capability and willingness to advance a nuclear power project in Myanmar. This decision follows a countrywide catastrophic 7.8 magnitude earthquake in March, which killed more than 3,700 people.
Even with the challenges they have experienced as a result of the earthquake, Rosatom is still pushing forward with its small modular reactor project in Myanmar. As currently conceived the project would start with two large, highly powerful 55-megawatt reactors. Collectively, they will produce a combined 110 megawatts to power the region’s energy needs.