Hitachi Ltd. has decided to continue talks over a ¥3 trillion nuclear power plant project in Wales after the British government made a financing offer, according to a source.
The maker of machinery and infrastructure systems made the decision at an extraordinary board meeting Monday and will exchange a document that will serve as a basic agreement with the British government if negotiations make progress, the source said.
The British government has offered to shoulder ¥2 trillion in loans directly and indirectly through a local financial institution. Even so, Hitachi remains concerned over the risk of pursuing the project due to the hefty cost.
The remaining ¥1 trillion to be financed by investments will be equally shouldered by three parties — Hitachi, a British group and a Japanese group.
Hitachi Chairman Hiroaki Nakanishi made a personal request to British Prime Minister Theresa May earlier in the month for support for the nuclear plant construction operations, another person familiar with the matter said earlier.
As other nuclear projects abroad involving Japanese companies have been struggling due to increased costs for safety measures, making progress in the Wales project is seen as a boost for Prime Minister Shinzo Abe’s goal of exporting nuclear power technology to drive economic growth.
The Japanese government is involved in the project through a state-backed financial institution.
Hitachi has indicated that should talks over the British government’s proposed funding prove difficult, the company may withdraw from the project after the total cost swelled for additional safety measures.
It remains unclear whether the nuclear power plant project as a whole will be profitable, as Hitachi and the British government are at odds over the purchase price of electricity to be produced at the plant, the source said.
Currently, the purchase price offer by the British government, which is considerate of local opposition, is some 20 percent lower than the price Hitachi wants, according to the source.
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.