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Areva, Siemens to pay €450m to TVO to settle Finnish nuclear plant dispute

EBR Staff Writer Published 12 March 2018

Areva and Siemens have agreed to pay €450m to settle their dispute with Teollisuuden Voima (TVO) over the delay caused in the construction of its 1,650MW Olkiluoto (OL3) nuclear power plant in Finland.

A global settlement agreement signed in this regard by the parties has resolved all disputes out of court while laying down a new cooperative mode to complete the Finnish nuclear power plant.

The OL3 nuclear power project was planned to enter into operations in 2010. Due to significant delays and cost overruns incurred, the consortium of Areva and Siemens and their client TVO had launched an arbitration procedure under the ICC rules in London.

With the settlement agreement being reached, the parties will withdraw ongoing legal proceedings related to the OL3 EPR project, including ICC arbitration. 

Areva said that the settlement agreement has retained the essential aspects of the original contract. It has also secured all human and financial resources required to complete construction of the third nuclear reactor OL3 of the Olkiluoto nuclear power plant, located on the Olkiluoto Island in western Finland.

Areva CEO Philippe Soulié said: “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.”

TVO said that if the OL3 plant is completed by May 2019, then it will pay back up to €150m. However, if that is not the case, then there will be an additional compensation to be paid of up to €400m to TVO.

OL3 is a European Pressurized Reactor (EPR), which will have an operation life-time of 60 years.

Areva board of directors chairman Philippe Varin said: “This Global Settlement of a notoriously difficult project is an essential milestone in the overall restructuring of the French nuclear industry.

“It provides an optimal environment to allow the AREVA SA-Siemens consortium to complete the OL3 project. We are pleased to have reached a settlement which de-risks the final phase of the project for all stakeholders.”

Image: The three reactors of Olkiluoto Nuclear Power Plant in Eurajoki, Finland. Photo: courtesy of Hannu Huovila / TVO / Wikipedia.org.