The Japanese government is calling on the country’s financial institutions to make good on an arrangement it has made with the UK government to put together a financial package totalling 1 trillion yen ($8.7 billion) for a UK nuclear power plant project. The project is spearheaded by Hitachi, which will be promoting Japan’s nuclear technology in anticipation of a nuclear power boom.
The British government has contracted Hitachi unit Horizon Nuclear Power to build and run two nuclear power reactors at a site on the Welsh coast known as Wylfa Newydd. The total project cost is estimated at around £19 billion ($24.1 billion) in all. It has been rumoured that the UK will pay 25% of that, with Hitachi contributing around 10%.
Japan's government will provide Horizon with loans through the Japan Bank for International Co-operation and the Development Bank of Japan. Nippon Export and Investment Insurance will provide credit insurance, while Japanese and UK financial institutions, including Japan's megabanks and HSBC, will be called on to put up additional capital.
By signalling strong support for the project, the governments in London and Tokyo aim to encourage other investors to join the funding. The hope is that such investment, along with revenue in the course of time from power generation, will cover the project's full cost.
Tokyo and London are also discussing over other matters such as prices and a time limit for a fixed-rate power purchase scheme once the plant goes live.
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