ENGIE Offloads 40% Stake in U.K. Nuclear Project

Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Further doubt has been cast over the U.K.'s largest planned nuclear project at Moorside after ENGIE (EPA:ENGI) (Paris, France) announced that it is backing out and will sell its 40% stake in the project to lead partner Toshiba Corporation (TYO:6502) (Tokyo, Japan).

The company is selling its stake in NuGeneration (NuGen), a U.K. joint venture with Toshiba, which already controls a 60% stake, for roughly $138 million. The news comes less than two weeks after Toshiba announced that its subsidiary Westinghouse Electric Company (Pittsburgh, Pennsylvania) had filed for Chapter 11 bankruptcy protection. Westinghouse has been contracted to supply three of its AP1000 reactors for the Moorside project in West Cumbria. With a generating capacity of up to 3,800 megawatts (MW) it would be the biggest nuclear plant in the U.K., capable of supplying 6 million homes with power.

"NuGen, the U.K.-based nuclear energy company that plans to build three Westinghouse AP1000 reactors in West Cumbria, at Moorside, is facing some significant challenges which have led ENGIE to exercise its contractual rights in view of transferring its 40% shares to Toshiba," the company stated. "ENGIE, as operator of an important European nuclear fleet, remains willing to put its know-how and expertise at the service of NuGen and help any restructuring with new potential partners for the development, construction and operation of the project."

ENGIE's CEO has previously stated that new nuclear projects were not a priority for the company. The Chapter 11 filing has given the company the right to exercise a contractual "get-out" clause. Toshiba said that it will "continue to look for investors interested in investing in NuGen and seek to sell off its holding in the company".

Industrial Info is tracking $38.5 billion in active projects involving Westinghouse that could be affected by the bankruptcy, including four nuclear power plants in the U.S. Southeast, the Moorside project in the U.K. and a major project under way in China. For additional information, see March 27, 2017, article--Westinghouse's Bankruptcy Unlikely to Affect more than $31 Billion in U.S. Nuclear Projects.

The U.K.'s business secretary, Greg Clark, is visiting South Korea this week and is expected to discuss the possibility of state-owned utility Korea Electric Power Corporation (KEPCO) taking part in the Moorside project. KEPCO expressed interest in the project as early as 2013 and talks were held again last year but no deal was forthcoming.

NuGen and the Moorside project have had to overcome a number of setbacks over the years. Toshiba bought its way into the U.K. nuclear sector in 2014 when it paid 128 million euro ($135 million) for its controlling stake. That comprised a 50% stake from NuGen founding partner Iberdrola SA (MCE:IBE) (Bilbao, Spain) and 10% from ENGIE, formerly GDF Suez (OTC:GDSZF) (Paris, France). For additional information, see July 7, 2014, article - Toshiba Buys into U.K. Nuclear Sector.

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