LONDON -- The British government will guarantee funds for a nuclear power project backed partly by companies from China, paving the way for the Asian nation to build other plants here.
The government will guarantee 2 billion pounds ($3.1 billion) in loans for the project at Hinkley Point in the U.K.'s southwest, expected to cost 24.5 billion pounds, Chancellor of the Exchequer George Osborne announced Monday on his visit to China.
State-owned enterprises China National Nuclear Corp. and China General Nuclear Power Corp. will invest in the facility alongside French energy company EDF. The British pledge is likely an attempt to draw further energy-sector investment from China ahead of President Xi Jinping's visit here in October.
"Nuclear power is cost-competitive with other low-carbon technology and is a crucial part of our energy mix, along with new sources of power such as shale gas," Osborne said. Chinese investment in the plant is a step forward for the "golden relationship" between the two nations, he said.
The deal could pave the way for Chinese-led nuclear power projects here, Energy Secretary Amber Rudd said. Chinese companies "want their design up and running in the U.K.," Rudd told the Financial Times.
"We welcome their investment and technology," she said. A British plant would mark China's first nuclear project in an advanced nation.
Roughly a quarter of the U.K.'s energy capacity will soon come up for replacement as aging nuclear and coal-fired power plants are retired. Hitachi and Toshiba subsidiary Westinghouse are also pushing to build nuclear plants here as the government rushes to secure sources of energy.