Japan's Hitachi Ltd. said yesterday it has decided to freeze a 3-trillion yen ($28 billion) British nuclear power project and will consequently book a write-down of 300 billion yen, a blow to Britain's nuclear strategy and a costly decision for the Japanese firm.
The suspension comes as Hitachi's Horizon Nuclear Power failed to find private investors for its plans to build a plant in Anglesey, Wales, which promised to provide about 6 percent of Britain's electricity.
The company said in a statement the decision was made "from the viewpoint of Hitachi's economic rationality as a private enterprise." The British government had reportedly agreed to finance two-thirds of the 3-trillion yen construction cost, with Hitachi as well as Japanese and British investors scheduled to cover the balance.
But Hitachi's fund-raising efforts have been deadlocked at home while its request for additional investment from the British government has been shelved with London consumed by Brexit.
Hitachi launched the planned construction after acquiring Britain-based Horizon Nuclear Power in 2012. Hitachi bought Horizon for 696 million pounds ($1.12 billion), from E.ON and RWE as the German utilities decided to sell their joint venture following Germany's nuclear exit after the Fukushima accident. The nuclear write-down wipes off the Horizon unit's asset value, which stood at 296 billion yen as of September-end, Reuters said. Hitachi stopped short of scrapping the northern Wales project. The company will continue to discuss with the British government on nuclear power, it said.
"Unfortunately, despite the best efforts of everyone involved, the parties have not been able to reach an agreement to the satisfaction of all concerned," Hitachi said.
The Japanese firm added: "As a result, Hitachi has decided to suspend the project at this time ... as it is now clear that further time is needed to develop a financial structure" for the project.