October 17, 2013 - 13:19 AMT
UK opens nuclear sector for Chinese investments

Britain opened the door to investment from China in its nuclear sector on Thursday, Oct 17, as finance minister George Osborne invited Chinese companies to take stakes in new nuclear projects, according to Reuters.

During a visit to China, Osborne said the two countries had signed a memorandum of understanding on nuclear cooperation that included roles for British companies in China's nuclear sector.

"While any initial Chinese stake in a nuclear power project is likely to be a minority stake, over time stakes in subsequent new power stations could be majority stakes," a statement from the UK Treasury said.

The government said this week it was "extremely close" to a deal with French energy company EDF related to building Britain's first new nuclear power station since 1995.

China General Nuclear Power Group (CGNPG) is set to join the project.

Osborne's statement did not refer to the EDF project. He was visiting a nuclear plant at Taishan in southern China on Thursday that is a collaboration between EDF and CGNPG.

Britain aims to renew its fleet of ageing nuclear power plants but needs foreign investment to pay huge upfront costs.

A report for the prime minister warned on Thursday that Britain's shrinking power capacity could lead to blackouts during the winter of next year.

Last year, Japan's Hitachi bought a new nuclear joint venture company from Germany's RWE and E.ON for a hefty price tag, underlining interest from Asian firms in entering Britain's nuclear industry.

Energy Secretary Ed Davey said on Sunday he expected nuclear investments from South Korea as well as money from China, Japan and France.

Thursday's MOU announcement also covers training in Britain for Chinese technicians, the statement said.

"Investment from Chinese companies in the UK electricity market is welcome, providing they can meet our stringent regulatory and safety requirements," Ed Davey said in the statement.

China has 17 nuclear reactors in operation, accounting for about 1 percent of electricity production capacity. Another 28 nuclear plants are under construction.

Osborne is in China on a trade mission that this week saw Britain take a step closer to winning the battle to become the main offshore hub for trading in China's currency and bonds by offering less stringent rules for Chinese banks setting up in London.