The British government has offered to guarantee loans for the planned construction of a new nuclear power plant in the country by Horizon Nuclear Power, a wholly-owned subsidiary of Japan’s Hitachi Ltd, according to a report in the Japanese media on Wednesday.
The Mainichi daily said the Japanese government planned to guarantee the loans; however, London demonstrated its willingness to increase its financial commitment to the project with a debt guarantee, after Hitachi’s call for further assistance.
According to the report, Hitachi Chairman Hiroaki Nakanishi met with British Prime Minister Theresa May in London last Thursday to discuss U.K. government backing for the plant.
"It appears British officials indicated they would provide backing for the project including loan guarantees, and urged Hitachi to move ahead," it said, adding Hitachi was expected to approve continued investment in the plant by the end of May.
The daily said that Hitachi bought the U.K. nuclear station development operation in 2012, and was planning to have the plant operational in the mid-2020s.
The project is expected to cost about 3 trillion yen (about 20.2 billion pounds, or $27.4 billion), the paper said, citing an anonymous source close to the project.
Two thirds of the cost will be covered by loans from British and Japanese financial institutions, with the remainder invested by Hitachi and both national governments, the daily added.
According to the report, the wholly Japanese government-owned Nippon Export and Investment Insurance body initially planned to guarantee the financing from Japan’s three big banks.
"However, in late April, the British government apparently suggested to Hitachi that the U.K. was willing to cover loans for the plant issued by both Japanese and British financial firms. Just before this, Hitachi had told London that it may pull out of the project if Britain was not ready to up its support," it said.
London tries to introduce alternative power sources for the future energy needs of the country by supporting new nuclear power plant projects.
In 2012, France’s EDF was awarded a £2 billion ($2.71 billion) contract to build Hinkley Point C in Somerset and this was a first in 20 years that a new nuclear power station in the U.K. was planned.
According to a statement on EDF’s website, Hinkley Point C is due to provide low-carbon electricity for around 6 million homes, create thousands of jobs and bring lasting benefits to the U.K. economy.
The statement says Hinkley Point C will mark "a significant milestone” in the revitalization of the country’s nuclear power industry, and make a “major” contribution to the U.K.’s move to reduce carbon emissions.
"The electricity generated by its two EPR reactors will offset 9 million tonnes of carbon dioxide emissions a year, or 600 million tonnes over its 60-year lifespan."
By Hale Turkes
Anadolu Agency
energy@aa.com.tr