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Centrica writes off £200M stake in Hinkley Point C project

Pressure on the government to agree a fixed electricity price for new nuclear power intensified this week after energy firm Centrica pulled out of the project to build a new nuclear power station plant at Hinkley Point.

hinkley

Hinkley Point C: EdF seeks partner

Centrica has written off its 20% equity stake in the project delivery vehicle which is developing the Hinkley Point C project in Somerset.

Development costs are close to reaching a pre-agreed cap of £1bn.

The remaining backer EdF Energy said it was still committed to building Hinkley Point C but is pressing ministers to agree a contract for difference - a long term fixed price for electricity - that would allow it to attract new investors.

“This contract for difference is now more than ever the key to attracting investors,” said EdF chief executive officer Vincent de Rivaz.

Crédit Agricole CIB managing director and head of project finance for its global loan syndication group Liam O’Keeffe agreed that EdF had to find a new equity partner because its banks would not fund the construction alone.

“It’s a very complicated project and there are many risks,” said O’Keeffe.

“You only need to look at what has happened in Finland [where a major project has suffered cost overruns and a legal dispute].”

Centrica cited increased construction costs and slipping timescales for abandoning its investment and writing off almost £200M.

EdF has repeatedly put off making a final investment decision on the project. It now hopes to make this by the end of March.

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