March 6, 2015
New financial blow for Hinkley Point C project near Burnham-On-Sea

Energy giant EDF has given a strong hint this week that nuclear reactor-maker firm Areva may pull out of funding the huge Hinkley Point C development near Burnham-On-Sea.

Vincent de Rivaz, EDF Energy chief executive told national media on Thursday that Areva’s proposed financial stake was "not existential” for the project.

Areva is contracted to provide two of its European Pressurised Reactors (EPRs) to the proposed power station but had also been lined up as a key investor to take a 10 per cent stake in the £24.5bn development.

However, deepening financial troubles at the government-controlled French company have thrown that investment in doubt, leading to further delays for Hinkley C.

Areva has this week reported a much-widened €4.8bn financial loss – more than its market cap of €3.6bn – in part due to massive cost overruns and delays constructing an EPR in Finland, while another EPR at Flamanville in France has seen similar problems.

Mr de Rivaz’s comments appear to be similar to those he made in summer 2012 when he said the project was "not depending" on Centrica’s 20 per cent stake, just months before the British Gas owner pulled out altogether.

EDF said in October 2013 that it intended to retain only a 45pc to 50pc stake in Hinkley Point. As well as Areva’s 10pc stake, EDF planned to sell a combined stake of between 30pc and 40pc to two Chinese groups: China General Nuclear Corporation and China National Nuclear Corporation, and up to 15pc to other parties.

The Chinese have been pushing for guarantees from the French Government, which owns 85pc of both Areva and of EDF, to protect them against cost overruns or Areva going bust.

Mr de Rivaz said he was confident that the Hinkley Point project would not be derailed whatever the outcome of the UK general election and said a final decision on the project was expected "as soon as possible" after the vote.

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