Japan intends to fully insure bank loans for one of Hitachi’s British nuclear plant projects in order to encourage domestic lenders to finance a particularly risky type of infrastructure export that Prime Minister Shinzo Abe’s government seeks to promote. When Abe met with U.K. counterpart Theresa May here Thursday, the two leaders reaffirmed bilateral cooperation on nuclear plant construction. Japan’s support will include coverage for two reactors at the proposed Wylfa Newydd nuclear station in Wales — a rare example of loan insurance for a project in an advanced economy. State-owned Nippon Export and Investment Insurance will write the loan insurance for reactors, which Hitachi will build through British arm Horizon Nuclear Power. The Japanese conglomerate, together with Tokyo and London, will conduct working-level talks to hash out a funding support framework, with the aim of breaking ground in 2019. The project is estimated to cost over 2 trillion yen ($18.1 billion). Hitachi, the U.K. government and two state-backed entities — Japan Bank for International Cooperation and the Development Bank of Japan — are expected to pick up part of the tab. But private-sector financing will also be needed to close the funding gap. NEXI, which normally indemnifies private lenders for 90-95% of financing, will enter into talks with Japanese banks toward fully guaranteeing loans for the Wylfa project.
Nikkei Asian Review 2nd Sept 2017 read more »
