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Risky tax-payer funding for Britain’s Wylfa nuclear power venture

FT 16th Jan 2018, The British and Japanese governments have agreed to explore options for
joint-financing of a nuclear power station in Wales, a softening of the
UK’s previous refusal to commit public funds to construction of new

Letters have been exchanged between London and Tokyo in which the
governments expressed support for the Wylfa nuclear project on Anglesey and
agreed to consider contributing to its financing, according to several
people involved in the process.

Wylfa is being developed by Horizon, a subsidiary of Hitachi, the Japanese conglomerate whose reactor technology
will be used by the plant. Partial public financing for Wylfa would
represent a new approach to nuclear construction in the UK by drawing on
the government’s access to cheap debt to reduce capital costs.

But it would also expose taxpayers to some of the associated heavy expense and
high risk. Ministers have been rethinking policy after heavy criticism of
the £20bn Hinkley Point C plant under construction in Somerset. The full
cost of that project is being met by its French and Chinese investors and
recovered through a levy on consumer bills.

Japan’s Asahi Shimbun newspaper reported last week that the UK and Japanese governments were
willing to work with financial institutions to extend as much as $20bn in
loans to finance Wylfa, and also to acquire a stake in Horizon. Several
people involved in the project said no such details had yet been agreed but
the exchange of letters between the two governments late last month had
“increased confidence on all sides”.

January 19, 2018 - Posted by | business and costs, Japan, politics, UK

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