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Financing Nuclear Power Projects: New Trends Emerging For Asia

Private sector financing for the nuclear industry is set to increase. The financial cost of new nuclear power projects is a major factor in planning for a sustainable nuclear future.
Traditional providers of capital to the nuclear industry have been governments and Export Credit Agencies (ECAs), with commercial banks and international financial institutions playing a lesser role.
However, new trends are emerging:- Nuclear Steam System Supplier (NSSS) vendors have recently been taking equity stakes in the projects and China’s biggest nuclear power developer, China National Nuclear Power Co. (CNNC), recently announced plans to access international capital markets via an IPO, proceeds of which will be used to fund five nuclear projects with a total required investment of 173.5 billion yuan ($27.25 billion).

“First, we are seeing a trend whereby NSSS vendors are putting equity into these deals, which provides an additional funding source for the prospective project.
Second, it is important to recognize that financing must be considered over a longer term than just the construction period.  By building a more comprehensive financing plan for the
prospective project, new sources of financing (e.g., project bonds and passive equity investors) can be integrated into the project after the first refuelling outage has occurred,”said Paul Murphy, Advisory Board member of Asia Nuclear Business Platform and Senior Attorney, Global Project Finance Group of Milbank.

“Finally, multi-owner models (Finland and perhaps Poland)and multi-owner off-take structures (Exeltium and Blue Sky) provide further viable financial models,
if the necessary market conditions for such structures are present.”

“New nuclear construction projects can and should look beyond the traditional sources of sovereign and ECA debt financing to cover the significant up-front
construction costs and long construction period required for these complex projects.  Accessing the capital markets though IPOs such as the recent announcement from CNNC
is one of the options while more innovative structures are likely to be developed.  The markets and banking community will find a receptive and welcoming partner in the nuclear industry,” said George Borovas, Advisory Board member of Asia Nuclear Business Platform and Head of International Nuclear Projects atPillsbury.

Taking place in the financial capital of Asia, Hong Kong, from 18th to the 20th February 2013, Asia Nuclear Business Platform will see international nuclear stakeholders convene to discuss nuclear sector developments such as the feasibility of financing options for new nuclear projects in the region.
Key nuclear financing stakeholders from both the private and public sector will be attending and giving their insights on the future of nuclear financing in Asia.

Financial stakeholders involved include:
-International Atomic Energy Agency
-Japan Bank for International Cooperation
-The Export-Import Bank of Korea
-Natixis Bank
-Fitch Ratings

About Asia Nuclear Business Platform
With an advisory board consisting of 23 international stakeholders, Asia Nuclear Business Platform is an event crafted by the industry for the industry focusing on new build in Asia.
Over 200 key industry stakeholders from across the nuclear supply chain will be in attendance to discuss nuclear sector developments, gather information andestablish strategic business relationships.
The conference will be preceded by a technical visit to Daya Bay Nuclear Power Plant Station.

For more information on this topic, please contact
Zaf Coelho, Project Director, Asia Nuclear Business Platform, Tel: +65 6636 3774, zaf@industry-platform.com


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