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Sat 13 Jan 2007 12:00 AM

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Japan and US move towards nuclear deal

The Japanese and US governments have agreed in principle for Japan to provide trade insurance to help Japanese companies take part in the construction of nuclear power plants in the US.

The Japanese and US governments have agreed in principle for Japan to provide trade insurance to help Japanese companies take part in the construction of nuclear power plants in the US.

The move is part of the Japanese government’s campaign to encourage Japanese nuclear reactor manufacturers, such as Toshiba and Hitachi, to play a role in US nuclear plant projects by applying the state-backed trade insurance system to cover part of the massive costs involved, reported
Japan Today

.

The insurance will compensate firms for losses suffered on overseas investment and trading.

The US government will provide debt guarantees under the accord. This is because US financial institutions are reluctant to extend loans for nuclear construction projects because US companies lack current experience in the field.

The agreement will help boost the presence of Japanese companies in the US, where many firms plan to build nuclear power plants.

More than 30 nuclear power plants are under consideration in the US following a policy change by the US government to promote their construction.

The construction cost of each nuclear power plant is an estimated US $3-4 billion.

Japanese companies are expected to help build all of the plants under a Japan-US corporate alliance.

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