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Japan, U.K. governments to support British nuclear project

The Japanese and U.K. governments have basically agreed to a financing framework of the public-private investment and loans of 3 trillion yen in total for a nuclear project Hitachi is currently undertaking in the U.K., the Asahi Shimbun has learned. Hitachi will contribute to just one-third of the investment of 450 billion yen. Also, the Japanese government will guarantee Japan’s share of the 2.2 trillion yen loan that will be split in half between the two countries. The Japanese government is poised to shoulder the risk of the nuclear business with unprecedentedly generous assistance. But if the project suffers a loss, Japanese taxpayers will be forced to bear the burden.


According to multiple sources, Tokyo and London confirmed the financing framework through an exchange of letters at the end of last year. The project is currently being undertaken by Hitachi to build two nuclear plants on Anglesey Island, in western U.K.  The Japanese engineering company plans to bring the plants online in the mid-2020s.


Hitachi bought the U.K.’s Horizon Nuclear Power from German utilities for about 90 billion yen in 2012. The latest financing framework centers on investment in and loans to Horizon’s operations. Hitachi, a Japanese consortium excluding Hitachi, and the U.K. side will invest 150 billion yen, respectively. The Japanese consortium is expected to be joined by government-affiliated Development Bank of Japan and major electric power companies.


The 1.1 trillion yen loan from the Japanese side will be primarily provided by the government-backed Japan Bank for International Cooperation and three megabanks. Government-controlled Nippon Export and Investment Insurance is considering underwriting it to the full. It is rare that a project for a developed nation is fully covered by trade insurance. (Abridged)

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