Japan's Hitachi Ltd decided on Thursday to freeze a 3 trillion yen ($28 billion) nuclear power project in Wales as Britain scrabbles for a way to exit the European Union, dealing a blow to UK plans for the replacement of ageing plants.
The suspension comes as Hitachi's Horizon Nuclear Power failed to find private investors for its plans to build a plant in Anglesey, which was expected to provide about 6 percent of Britain's electricity.
“We've made the decision to freeze the project from the economic standpoint as a private company,” Hitachi said in a statement, adding that it had booked a write-down of 300 billion yen. Hitachi had called on the British government to boost financial support for the project to appease investor anxiety, but turmoil over the country's impending EU exit limited the government's capacity to compile plans, people close to the matter have previously said.
Hitachi had banked on a group of Japanese investors and the British government each taking a one-third stake in the equity portion of the project, the people said. The project would have been financed one-third by equity and rest by debt. “It is now clear that further time is needed to develop a financial structure for the Horizon project and the conditions for building and operating the nuclear power stations,” Hitachi said.
With the clock ticking down to March 29, the date set in law for Brexit, the United Kingdom is now in the deepest political crisis in half a century as it grapples with how, or even whether, to exit the European project it joined in 1973.
Prime Minister Theresa May's two-year attempt to forge an amicable divorce was crushed by parliament this week in the biggest defeat for a British leader in modern history, deepening uncertainty for potential investors.
The withdrawal of the Japanese conglomerate could leave the nuclear newbuild industry open to Russian and Chinese state-owned companies as Western private firms struggle to compete.
China's General Nuclear Services, an industrial partnership between China General Nuclear Power Corp (CGN) and French utility EDF, plans to make a number of investments in Britain's nuclear power sector, most notably the Hinkley Point C project in southwest England.