Finances

TVO operates according to the cost price principle which means it produces electricity to its shareholders at cost price. The shareholders, for their part, cover all of TVO’s operating costs and, in return, receive electricity pro-rata to their respective shareholding for consumption by themselves or to sell to third parties.

This unique cost price model, also referred to as the Mankala model, gives electricity companies and electricity consumers of different sizes the opportunity to take advantage of the benefits of large-scale production. The model also contributes to facilitating major investments which nuclear power plant units always are, regardless of their size class.

With the ownership of TVO divided between Finnish industry and 131 different municipalities and towns, the stable benefits of the electricity produced by TVO are enjoyed across Finland.

Due to the cost price principle, conventional financial indicators created for comparing profit-making companies are poorly applicable to describing the operation of TVO. Indicators that are more relevant to TVO and the shareholders include the amount of electricity produced, the production cost, and the availability of the plant units, i.e., the reliability of production.

The stable and cost-efficient electricity supplied by TVO to its shareholders supports in a wider sense the Finnish electricity market and promotes the sustainable development of the society. This model of operation allows major investments in technology, which pays a key role in the clean transition towards a carbon neutral future. The most important indicators of economic responsibility are addressed in more detail in the Financial Statements of 2023.

Stable production and modernisations

The year 2023 was overall a good – even record-breaking – production year for TVO’s nuclear power plant in Olkiluoto. The three Olkiluoto plant units produced a total of 24.67 TWh to the national grid. As recently as in early 1970s, that would have been enough to cover Finnish electricity consumption in full.
Olkiluoto 1 (OL1) produced 7.42 TWh (billion kilowatt hours) of electricity. The production result of Olkiluoto 2 (OL2) was 6.87 TWh. The newest of the plant units, Olkiluoto 3 (OL3), was not yet in operation for the full year but still managed to reach a production volume of as much as 10.37 TWh.

TVO’s investments are designed to improve the availability, productivity, and safety of the nuclear power plant. TVO’s investments totalled EUR 449 million in 2023.

Financing secures continuity

TVO's financing situation has developed strongly and according to plans, with the Company using a versatile mix of financing sources. In addition to international capital markets, the Company obtains long-term funding from banks and other financial institutions. Credit ratings that reflect the financial stability and reliability of TVO play a significant role in capital market financing.

Effective financing ensures TVO's solvency under all circumstances. TVO's basic principle is to raise about three quarters of the funding required for investments from the financial markets and one quarter from the shareholders. TVO seeks long-term financing arrangements for the company as a whole instead of financing for individual projects. This strategy, which makes large-scale investments possible, requires strong trust among all parties.

For investors, the electricity production of the OL1 and OL2 plant units is of an extremely high value, as they have been generating electricity for more than four decades – with load factors that are high even in international comparison. The original investments in OL1 and OL2 have already been amortised in the main part, which further increases their attraction as investment targets.

TVO's shareholders, banks and investors strongly trust in the operations of TVO. This has been reflected in the significant reorganisations of bank financing and the issuance of new bonds, among others.
The stable financial position of TVO and the long-term financing arrangements secure the continuity of the Company and permit sustainable electricity production in the future.

First European nuclear power company to issue Green Bond

Towards the end of 2023, Teollisuuden Voima issued EUR 280 million worth of green bonds. TVO acted as a pioneer in this, being the first European nuclear power company to use a green bond. Nuclear was included in EU’s taxonomy in the summer of 2022. 

The proceeds of the issue will be used in initiatives and projects that comply with the Green Bond Framework of TVO. This Framework is based on environmentally friendly electricity production at TVO’s three nuclear power plant units in Olkiluoto as well as on responsible nuclear waste management. The production of a large volume of electricity on a small area of land also benefits biodiversity.

Read more about financing from TVO's Investors page.