Areva have agreed to pay $554m to Finland’s Teollisuuden Voima (TVO) for cost overruns and delays at the Olkiluoto nuclear reactor it is building with Germany’s Siemens.

The payment is expected to end the dispute over problems at the site, which is still not fully completed almost a decade later than scheduled.
Olkiluoto nuclear power plant
The plant suppliers and TVO had been claiming billions of euros from each other at an arbitration court, however, following the deal, the companies said they would withdraw all ongoing legal actions.

“TVO welcomes the agreement which ensures that the OL3 EPR (European Pressurised Reactor) project continues to have the necessary financial, technical and human resources for the completion and successful start-up of the plant,” TVO President Jarmo Tanhua said in a statement.

Reactor supplier Areva will pay the whole compensation for TVO as Siemens only delivered the unit’s turbine plant.

TVO said it will pay back up to EUR150m if the plant is completed on time, by May 2019.

In case the plant is not ready by the end of 2019, there will be an additional penalty of up to EUR400m.

“All parties wanted to find an alternative settlement to the arbitration. This settlement will allow us all to refocus all our resources and energy towards completion of this new EPR,” said Areva SA CEO Philippe Soulie.

He said the company would secure all resources necessary to complete the plant on time.

A turnkey contract for Olkiluoto 3, signed in 2003, fixed the cost of the reactor at EUR3.2bn. TVO said on Sunday that its overall investment will be around EUR5.5bn.

Areva-Siemens had been claiming EUR3.6bn from TVO while the Finnish company had filed a counter-claim of EUR2.6bn.

By the time of the agreement, TVO had won three partial rulings against Areva-Siemens from the International Chamber of Commerce’s arbitration court.

“It is a significant amount, although not exactly what TVO was looking for. But in this situation, this is a relatively good deal,” Finland’s Minister of Economy Mika Lintila told public broadcaster YLE.

Olkiluoto 3 is set to become Finland’s fifth and largest nuclear unit and provide about 10 percent of the country’s power needs.

TVO’s owners include Finnish paper companies UPM and Stora Enso as well as utility Fortum.