The Finnish energy giant gave up almost a billion euros in Nord Stream and plans to give up its Russian plants

Finland’s largest company announced on Tuesday that it will take a loss of almost one billion euros from the canceled pipeline project.

Its German subsidiary Uniper has a loan to the project company totaling EUR 987 million, including accrued interest. Fortum announced that it would write down its receivables and lose interest expectations of approximately EUR 100 million annually.

State-owned Fortum also announced plans to sell its Uniper power plant in .

Uniper’s share jumped more than nine percent and Fortum’s nearly seven percent after the parent company announced it was exiting the Russian market and recorded its exposure to the pipeline. These two issues have raised investor concerns about Russia’s attack on Ukraine and Germany’s subsequent decision to plug a pipeline designed to Russian fossil gas to mainland .

Uniper shares had lost more than half of their value since the beginning of this year.

Fortum said Uniper has been preparing for the possible sale of its separately listed Russian subsidiary Unipro since the end of last year and this process will continue as soon as possible.

Uniper continues to buy Russian coal

Unipro has five power plants in Russia with a combined production capacity of more than 11 gigawatts and employing 4,300 people. In total, Uniper and Fortum own about a dozen power plants in Russia, most of which are gas-fired.

Uniper has halted all new investments in Russia and fund transfers to Unipro.

The German company stated that it would not renew or start new coal or gas supply contracts with Russian suppliers. However, Uniper "continue with existing, long-term gas agreements from Russia, as they play an important role in securing heating for German households and securing gas for industrial processes in Europe," Fortumin VP Ingela Ulfves said in a statement Tuesday.

Fortum, which is almost 51% owned by the Finnish state, is by far the largest energy company in the country. Last Thursday, it announced that it had completed all new investment projects in Russia.

The value of Fortum’s Russian operations, including the Nord Stream investment, was approximately EUR 5.5 billion. The Russian operations accounted for about one-fifth of the Group’s total profit last year.

Fortum also owns 34 percent of the nuclear power plant planned for western Finland, which was to be built by a Russian state-owned company and whose key will be manufactured in eastern Ukraine.

Two days after the attack, the finance minister (Cen) announced that the project would be suspended indefinitely.

Source: The Nordic Page

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