UK offers $18bn loan to prevent Hitachi walking away from Wylfa nuclear scheme

The British government has offered to arrange a loan of $18.2bn to persuade Hitachi to press on with plans to build two reactors at the decommissioned Wylfa Newydd nuclear power station in Wales.

Hiroaki Nakanishi, the chair of Hitachi, met with Theresa May in London last Thursday to ask for greater UK state support for the project, including direct lending and loan guarantees to reduce the project’s borrowing costs.

The company is also looking for an increase in the price that will be paid for the 2.9GW of electricity that is eventually generated at Wylfa.

At the end of last month, Hitachi said it was looking to sell a majority stake in Horizon Nuclear Power, the company set up to carry out nuclear work in the UK by two German utilities, but which is now wholly owned by the Japanese engineer.

Hitachi’s decision followed a review that put the cost of construction at about £20bn, which it regarded as more risk than it could bear.

London has been trying to revive Hitachi’s enthusiasm for the scheme by putting forward ways to reduce its financial exposure. A failure to build a Wylfa, following on from the difficult birth of the EDF’s Hinkley Point C project in Somerset, would cast doubt on the UK’s plan to build a third generation of reactors at the UK’s nuclear sites.

The Nikkei Asian Review reports that the British government will submit a formal proposal to the Japanese in the next few days, after which the Hitachi board will make a final decision about the scheme before the end of May.

Hitachi has already invested about £1.3bn in reactor designs and construction preparations. If construction work begins next year, as scheduled, it will complete in the mid-2020s.

Image: Horizon Nuclear Power’s rendering of the Wylfa site

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  1. Socially gathered funds used to underwrite tender winning Contracs is farcical I hope this guarantees a strong agreement for the workers or at least adherence to the relevant National agreement NAECI

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