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Tokyo Electric to Drop Texas Stake Plan Without U.S. Guarantee
2010-11-02 07:10:55.280 GMT
By Bloomberg News
Nov. 2 (Bloomberg) -- Tokyo Electric Power Co., Asia's
biggest utility, said it will cancel plans to invest in a
nuclear plant in Texas unless the U.S. government guarantees
loans to fund a $10 billion expansion of the power station.
"The project is dependent on a loan guarantee by the U.S.
government," President Masataka Shimizu said in an interview in
Shanghai yesterday. "If the loan guarantee isn't forthcoming,
we will cancel the decision for the direct investment."
Tokyo Electric agreed in May to pay $125 million for a 9.2
percent stake in the South Texas nuclear project from Nuclear
Innovation North America LLC. The venture controlled by NRG
Energy Inc. and Toshiba Corp. plans to add two reactors and tap
incentives offered by the Obama administration to adopt
alternatives to coal-based power.
Tokyo Electric is in loan talks with the Japan Bank for
International Cooperation for the Texas plant and aims to sign a
preliminary financing agreement in 2012, Toshiro Kudama,
executive general manager of international affairs, said in an
interview on Sept. 30.
JBIC may lend as much as much as $4 billion for the plant
as long as the U.S. government provides a guarantee, Kudama
said.
Constellation Energy Group Inc.'s decision last month to
withdraw from another U.S. nuclear project may make it easier to
get a U.S. guarantee for the South Texas plant, Shimizu said.
Adding Reactors
Nuclear Innovation plans to add the 1,350 megawatt reactors
in Texas with commercial operations scheduled to start in 2016
and 2017. The plant will use reactors made by Toshiba.
"In the long term nuclear power is very effective for
energy development in the U.S.," Shimizu said.
More than 150 new reactors are planned worldwide by 2030,
with nine of them to be built in the U.S., where a further 22
are proposed as of Oct. 1, according to data compiled by the
World Nuclear Association.
Japan's government is seeking to promote the export of
nuclear technology and last month became a partner in Japan
International Nuclear Energy Development Co., a venture led by
Tokyo Electric to win contracts abroad.
The venture will become an adviser for a nuclear project in
Vietnam that was agreed between the Japanese and Vietnamese
prime ministers on Oct. 31. There are no plans for direct
investment at the moment, Shimizu said.
Tepco plans to open an office in Beijing by March 2011 amid
growing energy demand in China. The company said last month that
it aims to triple overseas power generating capacity to 10,000
megawatts by 2020.
"We just began a study on what we will do in the Chinese
market," he said. "Japan has advanced technology in coal,
nuclear, renewable energy and restriction of emissions of carbon
dioxide so we are thinking about opportunities there."
For Related News and Information:
Power markets: VOLT <GO>
NRG relative value graph: NRG US <Equity> RVG <GO>
NRG financial snapshot: NRG US <Equity> ISSD <GO>
--Winnie Zhu. With assistance from Tsuyoshi Inajima in
Tokyo. Editors: Aaron Sheldrick, Amit Prakash.
To contact the Bloomberg Staff on this story:
Winnie Zhu in Shanghai at +86-21-6104-3046 or
wzhu4@bloomberg.net
Tsuyoshi Inajima in Tokyo at +81-3-3201-2059 or
tinajima@bloomberg.net;
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net
To contact the editor responsible for this stor
Amit Prakash in Singapore at +65-6212-1167 or
aprakash1@bloomberg.net.
