Areva Said Ready to Join Group Building U.K. Nuclear Power Plant

Areva SA, France’s state-owned reactor builder, plans to join the group constructing the U.K.’s first nuclear power plant since 1995, three people with knowledge of the matter said.

Areva will take a stake in the Hinkley Point project from Electricite de France SA, the people said, asking not to be identified before an announcement is made. China General Nuclear Power Corp. will also become a shareholder, the people said. Areva and EDF’s boards will meet in the next week to approve the deal, they said.

Bringing in Areva and China General as partners will allow EDF to share the expense of a project likely to cost about 14 billion pounds ($22 billion). The EDF-led group, expected to sign an agreement with the U.K. government next week, will build two Areva-designed EPR reactors able to supply about 3,600 megawatts, more than 4 percent of U.K. generation capacity.

Officials at EDF and Areva declined to comment. Nobody at China General was available to comment outside office hours.

Areva, the world’s largest reactor builder, was the first company to start construction of the EPR, leading a project in Finland beset by cost overruns and delays. Since then Areva has been a supplier to EDF ventures in China and France without being a shareholder and has struggled to find its own projects.

Under previous Chief Executive Officer Anne Lauvergeon, Areva lost a bid to develop EPRs in Abu Dhabi. Last year, Areva and China Nuclear had considered a joint bit for Horizon, another venture seeking to build U.K. reactors. The current CEO Luc Oursel plans to get orders for 10 EPRs by the end of 2016.

The U.K. and EDF are close to an agreement to build the Hinkley Point reactors based on a guaranteed power price of 93 pounds a megawatt-hour, a government official said last week. That’s almost double the average 49 pounds a megawatt-hour power traded for in the wholesale market over the past 12 months.

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