Finnish water utilities to remain fully owned by municipalities: amended legislation proposal to ban privatization

Insights|January 9, 2025

The Finnish Ministry of Agriculture and Forestry has proposed an amendment to the draft Government Bill to ban the sale of municipal water supply ownership. Initially, the draft Government Bill to amend the Finnish Water Services Act included a provision allowing municipalities to divest up to 49% of their water utilities. However, based on feedback, the Ministry now proposes a complete ban on such sales.

The debate over water utility ownership began in early 2020 when the City of Jyväskylä considered selling a minority interest in its municipal energy company, which included the water utility. This proposal faced significant opposition from local political leaders, leading to a citizens’ initiative against the privatization of water utilities. The initiative quickly gained traction, gathering over 38,000 signatures within the first 22 hours and surpassing the required 50,000 signatures.

In September 2021, the Finnish Parliament approved the initiative and directed the Government to amend the Water Services Act. A draft Government Bill was subsequently prepared and circulated for public comment from July to September 2024. The proposal to allow up to 49% divestment of water utilities was met with widespread disappointment and opposition.

After reviewing the feedback, the Ministry of Agriculture and Forestry decided on 9 January 2025 to amend the proposal to ban all privatization measures. A new round of public comments is expected, with plans to submit the revised Government Bill to Parliament in the spring of 2025.

The primary goals of the reform are to ensure the provision of essential water services, maintain municipal control over water utilities, and improve the planning and management of water supply systems. The proposal also aims to clarify property owners’ obligations to connect to the water supply network.