The News That Matters about the Nuclear Industry Fukushima Chernobyl Mayak Three Mile Island Atomic Testing Radiation Isotope

British government to provide $18.2 billion for Hitachi to build Wylfa nuclear power station

Nikkei Asian Review 11th May 2018 The British government has proposed to arrange all 2 trillion yen ($18.2
billion) in lending that Hitachi says is needed to build a nuclear power
plant in Wales, as the Japanese side seeks to reduce its risk and encourage
the U.K. to put more skin in the game.

London had previously suggested that it guarantee 1 trillion yen in lending, but to get the project moving it
changed its offer to include approaches such as direct financing in order
to reduce Hitachi’s financial exposure.

The plan also calls for a totalinvestment of 900 billion yen, with Hitachi as well as Japanese and British
public-private interests each taking a one-third stake, and guarantees for
corporate loans. The total cost of the plant, to be built on the Isle of
Anglesey, is expected to swell to 3 trillion yen.

Hitachi Chairman Hiroaki Nakanishi met with Prime Minister Theresa May in London last Thursday to
ask for greater backing. The original plan called for the loans to be
provided by private lending institutions from both countries and guaranteed
equally by each government. State funding would come at a lower cost than
borrowing from private institutions and would demonstrate the U.K.’s
increased involvement as a backer of Hitachi’s nuclear power business,
which would ease raising funds and help secure investors.

The offer reflects the U.K.’s strong desire to proceed with the project, since
bankruptcy could place a burden on British taxpayers. The U.K. government
will submit a formal proposal to the Japanese side soon. Hitachi will then
make a final decision on whether to continue with the project at a board
meeting at the end of the month.

Some at Hitachi and in Tokyo have expressed concern about Japanese interests retaining leadership of the
project with two-thirds control. Hitachi and the U.K. are thought to be
discussing ways to prevent Hitachi’s exposure risk from rising, such as by
raising London’s stake or issuing dual class shares. But the British
Parliament is likely to oppose expanding the government’s stake, which
could throw a wrench in the project’s final shareholding structure or
allocation of costs. Hitachi is also requesting that the electricity’s
purchase price be raised, but the U.K. is opposed. It hopes to satisfy
Hitachi by covering all loans and raising its stake in the project.


May 12, 2018 - Posted by | business and costs, politics, UK

No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: