Announcing the government guarantee Chancellor of the Exchequer, George Osborne, said that nuclear power stations are "essential to make sure the lights stay on".
While on a five day tour of China, the Chancellor announced the new government guarantee, provided by Infrastructure UK, for a new nuclear power station planned for Hinkley Point C in Somerset.
The initial deal is set to be worth around £2 billion and will pave the way for a final investment decision by energy company EDF, supported by China General Nuclear Corporation and China National Nuclear Corporation, later this year, and with further amounts potentially available in the longer-term.
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The new plant is expected to produce enough energy to supply seven per cent of the country’s needs, powering around six million homes.
It is also expected to open the door to unprecedented collaboration in the UK and China on the construction of new nuclear power stations.
The agreement also boosts work being carried out under a Memorandum of Understanding on fuel cycle collaboration signed with China in 2014, which has the potential to leverage UK expertise in waste management and decommissioning as well as support UK growth.
Chancellor George Osborne said: "Britain was the home to the very first civil nuclear power stations in the world and I am determined that we now lead the way again.
"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.
"So I am delighted to announce this guarantee for Hinkley Point today and to be in China to discuss their investments in Britain’s nuclear industry.
"It is another move forward for the golden relationship between Britain and China – the world's oldest civil nuclear power and the world’s fastest growing civil nuclear power."
(MH/LM)
