The Tokyo Electric Power Company, Inc. (TEPCO) has entered into an agreement today
with Nuclear Innovation North America LLC (NINA), a nuclear development company
jointly owned by NRG Energy, Inc. (NRG) and Toshiba Corporation, to acquire an
interest in the planned expansion of the South Texas Project nuclear plant, which
will be the first project in the United States to utilize Advanced Boiling Water
Reactor (ABWR) technology.
TEPCO's investment in STP units 3 and 4 (STP 3&4) marks the first time a Japanese
utility has invested in an overseas nuclear power project.
STP 3&4 is an approximately 2,700 MW (two 1,350 MW units) project being developed
by NINA at the existing South Texas Project site in Matagorda County, Texas. STP 1&2
are presently under commercial operations and NINA anticipates having units 3&4
commence commercial operations in 2016 and 2017, respectively.
Given its expertise in ABWR construction and operation, TEPCO received a two-fold
request from NRG in August 2006 to provide technical consulting services and to invest
in the project. In response, TEPCO has provided technical consulting services to STP
3&4 since March 2007 and now commits to investing in the project. TEPCO's decision to
invest in STP 3&4 is based on the stable long-term earnings expected from the project,
as well as enhancing further growth via the creation of new international business
opportunities, contributing internationally towards the realization of a low carbon
society and fostering human resources related to the nuclear power business.
Upon the issuance and acceptance of a conditional commitment for U.S. Department of
Energy loan guarantee, TEPCO, through its U.S.-based subsidiary, will invest US$125
million in NINA Investments Holdings LLC (NINA Holdings), a wholly owned subsidiary
of NINA. This investment would result in a 10% equity ownership of NINA Holdings,
equivalent to 9.2375% interest of STP 3&4. TEPCO will also have the right through
an option payment of US$30 million to invest an additional US$125 million for an
additional 10% interest in NINA Holdings within approximately one year.
Presently, TEPCO is involved in nine thermal power projects in six countries and
also is participating in Eurus Energy Holdings, which operates wind power generation
plants in the U.S., Europe and Japan. Along with its overseas nuclear power business,
TEPCO will seek further growth and development by utilizing its technical expertise
and knowledge to expand its overseas consulting and power generation business.
Appendix: Overview of the South Texas Project expansion (STP 3&4)(PDF 268KB)