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Financiers take legal action against Finland for effort to suppress power transmission rates

Financiers in Finland's. largest power distributor Caruna are taking the Nordic nation. to arbitration, the Finnish foreign ministry stated, due to the. Finnish Energy Authority's attempt to curb rising power. transmission rates for ordinary consumers.

Financiers consisting of U.S. investment company KKR,. Swedish pension fund AMF and Canadian Ontario Educators' Pension. Plan (OTTP) have submitted two first-of-a-kind claims versus. Finland at the World Bank's arbitration body International. Centre for Settlement of Financial Investment Disputes (ICSID).

The financiers in Caruna, which holds roughly 20% of. Finland's power networks, implicate Finland of breaching its. commitment to stable energy policy under the 1998 Energy. Charter Treaty (ECT) that allows energy business to take legal action against. governments over policy changes that damage their financial investments.

In May, European Union countries including Finland concurred. that the EU will quit the ECT over climate concerns.

We have actually gotten a mediation request submitted via the ICSID in. Washington in August and are now checking out its contents,. senior adviser Maria Pohjanpalo of the Finnish foreign. ministry's trade policy system told Reuters.

She decreased to state if Finland, too, prepared to leave the ECT. individually from the EU.

Finland's Energy Authority changed from the start of. this year the method of computing the optimum profit power. transmission grid owners as natural monopoly holders can. collect, in an effort to curb increasing transmission rates which. has angered Finnish consumers for years.

The authority, which decreased to comment on the disagreement,. justified the choice in January by saying the previous. regulation puffed up existing grids' assessment and led to. unproven transmission rates.

The Finnish Energy Authority's abrupt and substantial. changes to its enduring energy policy have undermined. stability and breached Finland's responsibilities under the Energy. Charter Treaty, OTPP wrote in an emailed statement to Reuters,. with KKR echoing the message in a comparable declaration.

A preliminary estimate puts the size of the financier claim. at around 2 billion euros ($ 2.24 billion), a source familiar. with the matter informed Reuters.

The Energy Authority approximated that the regulative modifications. will lead to total power transmission sales continuing to grow. in Finland but at a 4 to 10% lower pace by 2031 than under the. previous policy.

We look for remedy for the losses sustained by us, and by. extension our pension savers, AMF said in an email to Reuters.

If the ICSID takes on the demands, processing might take. a number of years.

(source: Reuters)