The Hanhikivi-1 project was a major infrastructure initiative designed to add 1.2 gigawatts of nuclear capacity to Finland’s energy grid. When the construction contract was signed in 2013, the plant was projected to meet approximately 10% of Finland’s total electricity demand. The project was structured as a joint venture, with Finnish industrial stakeholders—including Fortum, Outokumpu, and SSAB—controlling two-thirds of the consortium through a joint venture, while the Russian side held the remaining third. The estimated value of the project stood at €7 billion ($7.8 billion).
The collaboration unraveled in May 2022, when Fennovoima decided to scrap the project. The Finnish utility cited significant delays in construction and escalating political risks following the outbreak of war in Ukraine as the primary drivers for the cancellation. At the time, the decision reflected a broader geopolitical shift in European energy security, where reliance on Russian energy infrastructure became a subject of intense political scrutiny. Rosatom, however, contested this narrative, maintaining that the project was progressing well at the time of termination and that the cancellation was not justified by the state of the work.
“Today’s victory is important, but not final. We will continue to prove that we are right regarding the Finnish project in courts of various instances,” said Alexey Likhachev, Director General of Rosatom.
Rosatom announced the arbitration decision on Saturday, with Director General Alexey Likhachev welcoming the outcome while emphasizing that the legal battle is far from over. The ruling specifically addresses the legality of the contract termination, establishing that the cancellation was unlawful under the terms of the agreement. However, the tribunal’s decision does not immediately settle the monetary disputes. Rosatom has launched additional proceedings to determine the final amounts to be recovered from the Finnish side, meaning the compensation will depend on the outcomes of these remaining cases.
Beyond the legal and financial dimensions, the dispute carries significant implications for energy policy and infrastructure planning. Rosatom argued that Finland had missed an opportunity to secure a modern nuclear power plant capable of supplying relatively inexpensive, low-carbon electricity. In an energy landscape increasingly focused on decarbonization and grid stability, the loss of a 1.2-gigawatt generation source represents a tangible gap in planned capacity. The project’s cancellation has left the consortium’s stakeholders to navigate the consequences of a halted multibillion-euro investment, with the Finnish partners now facing the prospect of substantial liability.
The arbitration win validates Rosatom’s position that the contractual obligations were not met by the Finnish side prior to termination. Yet, the resolution of the financial claims remains uncertain. The ongoing legal proceedings will determine the scale of compensation, a process that is expected to be lengthy and complex given the international nature of the dispute and the geopolitical tensions that precipitated it. For Fennovoima and its Finnish partners, the ruling underscores the risks associated with large-scale energy projects that cross geopolitical boundaries, while for Rosatom, it serves as a precedent in its efforts to recover costs from aborted international ventures. The final outcome of the remaining cases will define the economic impact of the Hanhikivi-1 cancellation on both parties, leaving the future of this nuclear project firmly in the hands of the courts.
