Finland regions

The project that marks a stain in Finland’s relations with Russia

Finland’s men’s ice hockey team won the world championships on home soil in spectacular fashion on Sunday, sparking tumultuous celebrations among normally reserved Finns. It caps an impressive time for the Nordic nation, which submitted its NATO bid earlier in the same month after a sufficiently thorough and well-prepared process and dealt with Russia cutting off its gas and electricity supplies without any worries. .

But May also marked the ignominious end of an industrial project in Finland called “a gargantuan mistake” by Charly Salonius-Pasternak, senior fellow at the Finnish Institute of International Affairs.

The Fennovoima nuclear power plant, which was to be built with Russian technology and large sums of Russian money, was abandoned without fanfare following Moscow’s full-scale war in Ukraine. It remains an unusual stain on Finland’s reputation as perhaps the best European country to do business with Russia, with which it shares a 1,340 km border.

“It’s a perfect symbol of that hubris of, ‘We’ll handle it so well that all those risks that we’ve been told won’t matter anymore, we’re so good at it,'” Salonius-Pasternak says.

The project dates back to 2007, when large Finnish industrial customers from energy and power companies teamed up to build a new nuclear power plant alongside German utility Eon. The signs looked good; another reactor — Olkiluoto 3 — was already under construction by a Franco-German consortium.

But by 2011, the outlook had deteriorated dramatically: the Fukushima nuclear disaster led Eon to withdraw while Olkiluoto 3 became mired in delays and legal disputes. (The start of full power generation is now set for September, 12 years behind schedule.)

Fennovoima chose Rosatom, the Russian state nuclear company, to build the reactor, in part because it was one of the few companies to continue after the Chernobyl disaster in 1986. But controversy was stoked in 2014 when days after Russia annexed Crimea, Rosatom also became a major shareholder in the Finnish project with a 34% stake.

The Finnish government‘s decision to approve the plans later that year – after Russian-backed separatists began a war in the Donbass region of eastern Ukraine – was deeply controversial. The leader of the Green Party, then a member of a five-party coalition, told the Financial Times it was about ‘Finlandisation’, a loaded term referring to how Finland was adapting its policies to the Soviet Union. But Finland still made progress.

Another chance to kill the project came a year later when Parliament’s demand that 60% of Fennovoima be owned by national groups – in practice, European groups – led to a farcical process in which an unknown Croatian company became an important shareholder, before the largest Finnish group Fortum was forced to support the project.

Fast forward to 2022 and a project that had been living on borrowed time for a long time has finally been put out of its misery.

This still leaves tricky questions for Finnish policymakers. Salonius-Pasternak once said that Finns have two parts of their brains they can keep separate – one that sees Russia as a security risk and one that sees it as a business opportunity.

But it didn’t go as planned with Fennovoima. The demand of some industrial users for reliable, long-term power has taken precedence over all fundamental national security considerations. Using a Russian-backed project to reduce Russia’s dependence on electricity has always been twisted logic at best, and Moscow’s growing aggressiveness has only highlighted the problems. “It was really a mistake from the start, but many thought we could contain the risks regarding Russia,” said an official involved in the process.

The fallout may even have influenced the current Finnish government in its firm stance to rid the country and the EU of Russian energy. Olkiluoto 3, finally going live this year, comes at just the right time to ensure that a move away from Russian energy isn’t dramatic.

For Finland, the full-scale war against Ukraine, another non-NATO neighbor of Russia, meant, in the words of its president, that the mask had fallen “and only the cold face of war is visible”. Trade relations between the two countries have almost ceased.

Long after the ice hockey hangover has subsided, Fennovoima is likely to stand as a tribute to another era, when Finland could afford to make mistakes on its eastern neighbor.

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