By Constructing Nuclear Power Plant with Russia, Finland Following Interests

RIA Novosti, PUBLISHED 17.09.2014

Finland's decision to continue with the construction of the Hanhikivi 1 nuclear power plant with Russia, revealed amid another round of economic sanctions against Moscow, was dictated by practical considerations and the long-term economic interests of Finland, not by short-term political point-scoring, analysts, questioned by RIA Novosti say.

"Building a nuclear power plant is a rather expensive project and the Finns are interested in mobilizing Russia's co-financing. The terms are too good to give it up that easily," Yuri Prokudin, analyst at MFX Broker, told RIA Novosti. He reminded that even though the last package of the European economic sanctions targeted the Russian energy sector, it did not include the nuclear energy sector and thus formally Finland is not contradicting any EU decisions.

Dmitry Kumanovsky of the LMS Investment Company explained that Finland's communication and electronic spheres are currently suffering a production decline. "The construction of a new nuclear power plant allows (them) to secure the competitive advantage for Finland's economy – cheap electricity," Kumanovsky said.

Kumanovsky noted that it took years for Finland and Rosatom to build their partnership and that the project proposed by the Russian state-run nuclear corporation will yield economic benefits for Finland.

"To decline it for short-term political point-scoring is practically impossible without having to suffer serious reputational and economic losses," said Kumanovsky.

Alexander Ignatyuk, head of research at Investment Company Energocapital, agreed with this. "In recent years, the political situation has changed rapidly, but economic and social drivers are established by the implementation of long-term projects, " he said, adding that the Finnish government does not tend to mix transitory political confrontations with long-term partnerships.

Russia's state-run nuclear corporation Rosatom is set to build and part-own a 1,200 megawatt pressurized water reactor at the Hanhikivi 1 plant in Northern Finland. According to the companies' schedule, the nuclear power plant will begin producing electricity in 2024.

On Monday, Finnish Prime Minister Alexander Stubb said that EU sanctions against Russia will not affect Finland's cooperation with Rosatom on the building of the Hanhikivi 1 nuclear plant.

Topics: Europe, Finland

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