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 total investment 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.
Nikkei Asian Review 11th May 2018 read more »
The British government has proposed to arrange all 2 trillion yen ($18.28 billion) in loans that Hitachi Ltd needs to build a nuclear power plant in Wales, the Nikkei business daily says. London, which had previously suggested that it would guarantee 1 trillion yen in lending, has boosted its offer to reduce Hitachi’s financial exposure, the report says. The plan also calls for a total investment 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 report says. The total cost of the project is expected to rise to 3 trillion yen, the report says
Reuters 11th May 2018 read more »
The government has rejected claims it has struck a deal with developer Hitachi to provide financial guarantees for its planned £10bn nuclear power plant in north Wales.
Construction News 10th May 2018 read more »
A fake price for the faltering proposed Wylfa nuclear plant will obscure the fact that the project, backed by Hitachi, will be even more expensive than Hinkley C. Negotiators for the Wylfa project are clamouring for the Government to use taxpayers money and a commitment to pay at least some of the risks of construction cost overruns to massage the price of the deal down compared to Hinkley Point C. If this is done, then the combined support for Hinkley C and Wylfa projects through loan guarantees, equity support and risk underwriting could rival the size of bill the UK has to pay the EU for Brexit. But a carefully contrived fake price produced by giving a massive taxpayer funded handout to the project will obscure this terrible consequence. Hinkley Point C (HPC), scheduled to be built by EDF, is now said to cost around £20 billion, almost exactly the same as the cost of the Hitachi-led Wylfa project. In fact both of these figures do not appear to include interest charges, and so will be underestimates of the total mount of money needed to be paid out before the plant is even built. But the interesting thing is that whilst the Hinkley C project is 3.2GW, the Wylfa project is smaller, at around 2.9 GW, which actually makes the Hitachi project even more expensive!
Dave Toke’s Blog 10th May 2018 read more »