Based on the disclosure so far this looks likely to be an outstanding deal for Edf and its partners. On a leveraged basis we expect Edf to earn a Return on Equity (ROE) well in excess of 20% and possibly as high as 35%. We forecast that cash dividends of between £65bn to £80bn should be payable during the life of the Cfd. Note that paying these dividends would still allow Edf to pay off all construction debt within the term of the Cfd. When the station commissions in 2023 the strike price will likely be above £121/MWh. For this to be competitive with fossil fuels, the gas price will need to have increased by at least 130% from today’s levels. Once again, the UK government is taking a massive bet that fossil fuel prices will be extremely high in the future. If that bet proves to be wrong then this contract will look economically insane when HPC commissions. We are frankly staggered that the UK government thinks it is appropriate to take such a bet and under-write the economics of any power station that costs £5m per MW and takes 9 years to build.