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ECONOMY > Energy

Britain offers 2 tril. yen loan for Hitachi’s Wales nuclear project

  • May 17, 2018
  • , Kyodo News , 3:02 p.m.
  • English Press

TOKYO — The British government is offering to shoulder 2 trillion yen ($18 billion) in loans and other means to cover a huge portion of the cost of a project pursued by Hitachi Ltd. to build nuclear reactors in Wales, a source close to the matter said Thursday.


With the proposal aimed at easing concerns about swelling costs that have ballooned to 3 trillion yen, the Japanese maker of machinery and infrastructure systems will make a decision, possibly this week, on whether to go ahead with the project, the source said.


If it decides to continue, Hitachi is set to exchange a document that would serve as a basic agreement with the British government.


But observers have questioned whether the British government could implement the proposal worth 2 trillion yen, as some members of the British parliament are opposed to extending excessive financial support to the nuclear project.


Hitachi had applied for a site license to build two advanced boiling water reactors on the Isle of Anglesey in Wales, to be overseen by its British nuclear unit Horizon Nuclear Power Ltd. It aims to start operation from the first half of the 2020s.


But concerned about the operational costs, Hitachi Chairman Hiroaki Nakanishi made a personal request to British Prime Minister Theresa May on May 3 for support for the nuclear plant construction operations.


Hitachi has indicated that should talks over the British government’s proposed funding prove difficult, the company may withdraw from the project. The total cost of the project has swelled due to increased costs for safety measures.


Hitachi acquired Horizon Nuclear Power in 2012 as it aimed to expand its nuclear power business abroad amid dim prospects for new reactor demand in Japan in the wake of the 2011 Fukushima crisis.


Progress in Hitachi’s overseas nuclear project comes as a boost for Prime Minister Shinzo Abe’s policy goal of exporting nuclear power technology to other nations to drive economic growth at a time when other nuclear projects abroad involving Japanese companies have been struggling.


Among Hitachi’s rivals, industrial conglomerate Toshiba Corp. has also pulled out of overseas nuclear operations after incurring huge losses in its atomic business in the United States.


A nuclear power plant project in Turkey, pursued by Mitsubishi Heavy Industries Ltd., has also hit a snag owing to a surge in safety-related costs.

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