Areva: Structure of the Partnership for Hinkley Point C Project

  Areva: Structure of the Partnership for Hinkley Point C Project

Business Wire

PARIS -- October 21, 2013

Regulatory News:

Areva (Paris:AREVA):

EDF Group today announced a comprehensive set of agreements for the proposed
nuclear power station at Hinkley Point C. This additional news release
contains further details of agreements with new partners for the project.

Preliminary works for the Hinkley Point C project are well advanced and an
agreement has been reached in principle on an investment contract for the
planned station. It has an approved EPR reactor design, regulators have
awarded relevant nuclear site licences, labour relations agreements are in
place and the UK Government has granted permission for construction.

Finalising agreements with industrial partners for equity funding is one of
the remaining key steps necessary before a final investment decision can be

Industrial partnership

Letters of Intent have now been signed by EDF Group, AREVA, CGN (China General
Nuclear Corporation) and CNNC (China National Nuclear Corporation) to become
strategic and industrial partners in the project.

AREVA, which is the worldwide leader of the nuclear supply industry, is a
long-standing partner of the EDF Group. In the UK, AREVA has developed a
growing presence in nuclear fuel, services and backend expertise. Jointly with
the EDF Group, AREVA has pursued the Generic Design Assessment (GDA) of its
EPR technology, making it the only generation III design certified in the UK.

EDF Group and AREVA has been working with both CGN and CNNC for 30 years in
the construction and operation of nuclear power plants to international
standards. In addition, AREVA has developed fruitful industrial relationships
with CNNC, both in the reactor and fuel cycle businesses. The new partnership
for Hinkley Point C will bring a range of benefits to the project, the UK,
France and China.

EDF Group has world-class expertise in the operation and construction of
nuclear power stations. Through EDF Energy which operates 15 reactors, it is
the leader in nuclear power in the UK. Improvements in safety, operational
performance and high levels of investment in its eight power stations have
demonstrated that EDF Energy is a trustworthy and responsible operator in the

Both Chinese partners have extensive and wide-ranging capabilities in the
development and construction of nuclear power stations. CGN currently operates
8.3GW of nuclear power. It has eight units in operation and has 15 under
construction, including two EPR reactors being built in a joint venture with
EDF at Taishan. CNNC has nine units in operation and 12 under construction.

EDF Group will be the “responsible designer” for the project with a central
role in the design and engineering of the power station at Hinkley Point C.

The partnership will give CGN and CNNC the opportunity to gain experience in
the UK and will support their long term objective of becoming established
nuclear developers in the UK in partnership with EDF Group and in full
compliance with UK regulatory requirements.

Equity Share

The share of equity is expected to be:

EDF Group                                        45-50%
AREVA                                            10%
China General Nuclear Corporation (CGN)          } 30-40%
China National Nuclear Corporation (CNNC)
Discussions are taking place with a shortlist    15%
of other interested parties who could take up to

The UK’s strong nuclear regulation regime ensures that all builders and
operators must demonstrate that they operate in the interests of the UK and
meet strict compliance requirements for safety and security.

A number of suitably qualified Chinese personnel will join the project to work
alongside members of the project team, subject to the usual approvals from the
UK regulators.

The risk of constructing the power station to budget and schedule will be
shared by EDF Group and its partners.

Luc Oursel, CEO of AREVA said: “The Hinkley Point project is a priority for
AREVA and for the whole French nuclear industry, and the group is engaged to
ensure its success. Today’s agreement represents the fruit of a joint
endeavour with EDF since 2007 to contribute to the renewal of nuclear energy
in the United Kingdom. This 5th and 6th EPR projects will benefit from the
experience gained from the EPR reactors under construction in Finland, France
and China”.

He Yu, Chairman of China Guangdong Nuclear Power Holding Co. (CGN), said: “CGN
is interested in the UK electricity market and will play a key role in the HPC
project. CGN would contribute to the project by bringing its experience and
expertise, particularly acquired from the CGN controlled Taishan EPR project
to HPC. CGN has a long term target and objective in the UK nuclear new build
program and it is appreciated that both EDF and the UK government have
expressed their undersdanding of this and agree to give support accordingly.”

Sun Qin, Chairman of (China National Nuclear Corporation) CNNC said: “CNNC is
glad to see that UK government and EDF Group have reached an agreement on the
key items of the HPC project. We think that the HPC project has a great
significance in both UK energy market and world nuclear power development, and
we are proud to participate in it. With experience of all aspects of the
nuclear industry and 30 years of building nuclear power plants, CNNC will
participate in the UK nuclear new build program with the support of EDF and UK

EDF CEO Henri Proglio said: “The agreement in principle reached today with the
British government offers industrial players a clear and long-term framework
that will encourage investment. I am also delighted that other major world
nuclear industry players have decided to join us in this large-scale project.
Areva, our historical partner, along with CGN and CNNC, with whom we have been
working for 30 years, will contribute their expertise alongside EDF, working
towards the success of the Hinkley Point project.”

These new alliances between British and French industry will allow both to
take a leading role in this project and nuclear projects around the world. The
project will draw on the global nuclear supply chain, providing opportunities
for countries including China.


EDF in Paris:
Carole Trivi & Aurélien Cassuto : +33 (1) 40 42 46 37
EDF Energy in London:
Sue Fletcher: / 07736727964
Nick Foley: / 020 7752 2196, 07875110674
Louis Blake: / 020 7752 2248, 07875114307
AREVA in Paris
Julien Duperray & Katherine Berezowskyj: +33 (1) 34 96 12 15
Analysts and Investors
Carine de Boissezon & Kader Hidra: +33 (1) 40 42 45 53
David Newhouse (investisseurs US): + 33 (1) 40 42 32 45
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