Business / Corporate

Hitachi may delay final decision on nuclear plant project in Wales

JIJI

Hitachi Ltd. may have to delay its final decision, planned for 2019, on a nuclear plant construction project in Britain.

By the end of this year, Hitachi hoped to select a company that will acquire an equity stake in a British nuclear business subsidiary that will operate the project. However, according to informed sources, it is now difficult to secure an investor by the year-end.

Therefore, a final decision on the project will likely be delayed. This in turn could force a postponement of the start of plant operations, which is currently slated for the early 2020.

Through the subsidiary, Hitachi plans to start constructing two reactors on the island of Anglesey in Wales as early as 2020.

To reduce management risks associated with the project, Hitachi aims to lower its equity ownership of the subsidiary from the current 100 percent to less than 50 percent.

But Hitachi’s negotiations with the British government on financial assistance to ensure profitability of the project have not been concluded, and the company has yet to start full efforts to invite applications for investment in the subsidiary, the sources said.

With the total project cost estimated at ¥3 trillion, well over the initial plan, Hitachi agreed in June with the British government to start full-scale negotiations in order to get the project going.

The two sides have discussed the possibility of the British government providing loans of more than ¥2 trillion or acquiring an equity stake worth some ¥300 billion, but they are believed to have not yet reached an agreement.

Prime Minister Shinzo Abe may hold talks with his British counterpart, Theresa May, in January.

Hitachi plans to decide carefully whether the nuclear project is still feasible while looking at the results of the bilateral summit talks, the sources said.