Japan is one of the few countries that manufactures and exports components for nuclear reactors. The Japanese government is putting together an eight billion seven hundred million dollar aid package in support of a United Kingdom nuclear power project. Hitachi is spearheading the project.
The British government has signed a contract with the Hitachi unit Horizon Nuclear Power (HNP) for the construction and operation for two nuclear power reactors at Wylfa Newydd on the Welsh coast. The estimated cost of this project is about twenty four billion dollars. The U.K. is slated to cover about twenty five percent of the cost of the project. Hitachi was going to pick up ten percent of the cost. Officials from Japan and the U.K. are meeting with the hope of having a solid financing plan for the project in place by next year.
The new Japanese initiative calls for the Japanese government to supply loans to HNP through the Japan Bank for International Cooperation and the Development Bank of Japan. Credit insurance will be provided by Nippon Export and Investment Insurance. Major financial institutions in the U.K. and Japan will be asked to provide addition capital. All together, this financial assistance should supply the eight billion seven hundred million dollars mentioned above. The U.K, and Japan hope that the involvement of their governments in financing the project will attract other investors.
David Cameron, the previous U.K. Prime Minister, was focused on China as the main partner for U.K. nuclear development projects. The Chinese have about a thirty percent stake in the two new power reactors being built for the Hinkley Point C project in Britain. Part of the deal included permission for the Chinese to build one of their reactors in Britain.
When the citizens of the U.K. voted to exit the European Union, a new Prime Minister, Theresa May, came to power. She called for a review of the Hinkley Point C project signaling that she was not as sold on Chinese involvement in the U.K. nuclear power industry as her predecessor. This change in U.K. international status and relations have prompted Japan to jump into taking a bigger stake in financing the Wylfa Newydd project.
Japanese Prime Minister Abe has made nuclear power and nuclear component exports a major part of his economic development plans for Japan. Japan is still struggling to restart all of its domestic power reactors after the Fukushima nuclear disaster in March of 2011. Nuclear export prospects were looking up but recently Mitsubishi Heavy Industries lost a contract when Vietnam decide to cancel an order for a nuclear power reactor.
There have been estimates that the global nuclear industry will expand by sixty percent by 2030. Japan is hoping that its expanded involvement in Wylfa Newydd project in the U.K. will help it get contracts from other countries that are looking to build nuclear power reactors. On the other hand, complaints of substandard nuclear components in France included parts made by Japan Casting & Forging Corp. Although further investigation has not shown any problems with Japan Casting & Forging Corp parts, this incident could damage Japans international reputation as a source of reactor components.
