Orpo government's most visible environmental project is collapsing – the state seemingly will not get the Palokki power plant

Palokki is a dam and hydroelectric power plant in Heinävesi, Finland. Pohjois-Karjalan Sähkö owns the facility. The Finnish government wants to buy it from the company and remove the dam. This is the most visible nature-protection project in Prime Minister Petteri Orpo’s government programme.

The stated aim is to improve conditions for migrating salmonid fish. A dam can block or restrict fish movement along a river. Removing it would open the waterway and support the life cycle of fish that migrate between different parts of the river system. The article does not provide further ecological measurements or describe the river’s current fish populations.

The goal was written into the government programme in 2023. However, Pohjois-Karjalan Sähkö has reportedly not changed its position and does not intend to sell the plant to the state. The plan therefore depends on whether the company’s owners and board ultimately accept the proposed transaction.

The government’s plan to acquire Palokki has stalled and is described as close to failing. Pohjois-Karjalan Sähkö, which owns the dam and power plant, reportedly does not intend to change its position or sell the facility to the state. The company has also said publicly that the state’s offered price is too low.

Formal power rests with Pohjois-Karjalan Sähkö’s board. Its chair, Paavo Haverinen, says the board respects shareholders’ views but must make decisions under the Limited Liability Companies Act. The company’s ownership is divided among municipalities, companies and communities, both directly and through a holding company.

Pohjois-Karjalan energiaholding owns about 54 percent of PKS shares. Its board was due to discuss Palokki in mid-November, making its view practically decisive. Most directly owning municipalities already support removal, but the position could still change before the final meetings on the following Monday.

Pohjois-Karjalan energiaholding owns approximately 54 percent of Pohjois-Karjalan Sähkö’s shares. That makes the holding company the power company’s largest owner and gives its position practical importance in the Palokki decision. The holding company itself is fully owned by municipalities.

Ownership is spread across 17 municipalities in the company’s operating area. These municipalities own PKS partly directly and partly through Pohjois-Karjalan energiaholding. The shareholder group also includes companies and communities, including the state-owned Metsähallitus and Broman Yhtiöt.

This structure explains why the ownership picture is complicated. A majority of municipalities that directly own shares currently support removing the dam, but the holding company’s board has not yet settled the matter in the article’s account. Its 54-percent stake means that its view is effectively decisive, while the PKS board retains formal decision-making authority.

The article connects Palokki’s removal with better conditions for migrating salmonid fish. These fish need to move through rivers during different stages of their lives. A dam can interrupt that movement. Removing the obstruction could therefore reconnect parts of the waterway and create more accessible habitat.

The concrete ecological result described in the article is support for the life of migrating salmonid fish. It does not give estimates for fish numbers, reproduction, water quality or other ecosystem changes. Those outcomes would depend on local river conditions and on what happens after removal, so the article alone cannot quantify them.

If the dam were removed, the project would represent a major change to the local river environment. It could help restore fish passage, but the article does not describe a monitoring plan or list other expected ecosystem effects. The state’s stated conservation purpose is the main basis for assessing the proposal’s ecological importance.

Municipal owners and the power company’s board are weighing different considerations. Most municipalities that directly own PKS shares have stated support for removing Palokki. Their position reflects support for the government’s nature-protection objective, although the article does not give each municipality’s reasons individually.

PKS’s board has previously said the state’s offered price is below the acceptable level. Board chair Paavo Haverinen says the board respects the majority’s opinion, but decisions must follow the Limited Liability Companies Act. The board must also protect the company’s interest, rather than simply carry out every owner preference.

The conflict is therefore about both environmental policy and corporate decision-making. Teemu Mustonen says the energyholding supports PKS’s board and will not yield to the government’s offer. Municipal positions could still change before the last meetings, while the PKS board has the formal authority to decide.

If Palokki is not removed, migrating fish could potentially be supported through measures that improve passage around or through the dam. Common approaches include a fish ladder, a bypass channel or managed fish lifts. These options aim to let fish move upstream and downstream without dismantling the entire structure.

Other possible measures include restoring spawning and nursery habitat, improving river flows during migration periods, and reducing barriers elsewhere in the same river system. Hatchery stocking can sometimes supplement populations, but it does not replace free movement and suitable habitat. These are established conservation options, not measures described in the article.

The article gives no alternative plan for Palokki if the sale fails. It only states that the government wants removal to promote migrating salmonid fish. Whether another approach would work would require local studies, design, permits and agreement among the state, the company and its owners.

Company ownership does not mean every shareholder instruction automatically determines an operational decision. Under the principle cited by PKS’s chair, the board must act according to the Limited Liability Companies Act and carefully represent the company’s interest. This gives the board responsibility for evaluating a proposed sale, including its financial and legal consequences.

At PKS, the board says it respects the majority’s opinion but also has a duty to protect the company. The board has already stated publicly that the state’s offered price is too low. That position explains why it may resist the government’s offer even though most direct municipal owners support removing the dam.

The article presents this as the key tension in the decision. Pohjois-Karjalan energiaholding’s view is practically decisive because it owns about 54 percent of PKS, but the PKS board retains formal authority. The final outcome depends on how the board applies its legal duties and assesses the offer.