Palokki hydropower plant: nine of 17 owner municipalities back sale to the state, but the PKS board holds firm

Prime Minister Petteri Orpo’s government wants to buy the Palokki hydropower plant in Heinävesi, eastern Finland, from Pohjois-Karjalan Sähkö (PKS), demolish its 1961 dam and free ten rapids for critically endangered migratory fish. According to a tally published on 3 November by Heinäveden Lehti, nine of the 17 municipalities that own the holding company Pohjois-Karjalan Energiaholding support the sale, six oppose it and two have taken no position.

The numbers. According to Yle, the holding owns more than half of PKS’s shares; within it, 45.2% of shares favour the sale, 44.5% oppose it and 10.3% have no position. Among municipalities holding PKS shares directly, 23.7% support the sale, 15% oppose it and 4.9% have no position. Joensuu, Kitee, Liperi, Heinävesi, Kontiolahti, Outokumpu, Polvijärvi, Savonlinna and Kuopio are in favour; Kaavi, Lieksa, Nurmes, Tohmajärvi, Rääkkylä and Juuka are against.

The offer. In June the state proposed two options: a direct sale for €30 million, closed in 2026, or moving the plant into a subsidiary in which the state would take 10%, with a €10 million advance and a final price of at least €40 million based on valuations by two or three independent investment banks, Kotiseutu-uutiset reported. According to Yle, PKS considers the offers to be less than half the plant’s value. Prime Minister Orpo says Palokki accounts for about 0.2% of Finland’s hydropower capacity and plays no significant role in balancing the system or in security of supply.

What comes next. PKS board chair Paavo Haverinen told Yle the board will not change its decision, citing its duty under companies law to act in the company’s interest. The municipalities’ position is not binding on the board. The holding decides in mid-November and the PKS board will take a position on the state’s offer at the end of the month; dissatisfied shareholders can call an extraordinary general meeting, which could even consider dismissing the board.

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