The joint venture with Electricite de France (EDF) and China General Nuclear Corporation (CGN) now has a name and that joint venture, called Nuclear New Builds Generation Company (NNB), has already begun signing contracts, AREVA announced Friday.
AREVA said that it had signed contracts with EDF and NNP related to the Hinkley Point C project, which is expected to cost $24 billion to build. The value of the contracts, said AREVA, is over 5 billion euros. In U.S. dollars, 5 billion is $5.61 billion dollars.
AREVA NP will be responsible for delivery of the two nuclear steam supply systems that will be employed by the two European Pressurized Reactors (EPR) that will make up the Hinkley Point C project. The work extends “from design and supply to commissioning,” AREVA said.
AREVA NP will also design, supply, install and commission the plant's operation and safety instrumentation and control system.
A long-term fuel supply contract was also signed. Under that contract, AREVA NP will fabricate the fuel needed for the two reactors. The fuel contract calls for AREVA to provide services from mining to processing fuel, noting their task will be “to provide the material for fuel fabrication, producing uranium and providing conversion and enrichment services.”
“These activities will start in the early 2020s,” AREVA said.
EDF and AREVA have a long history together, as both are based in France, which employs 58 reactors at 19 power stations to provide about 75 percent of its electricity.
France is the world's largest exporter of electricity due to relatively low production costs, according to the World Nuclear Association.
In July 2015, EDF signed a memorandum of understanding that sets up the purchase of at least 51 percent of AREVA's reactor business, AREVA NP, which supplies components and fuel for nuclear power plants. AREVA's stake in that is expected to drop to 25 percent or less – the arrangement designed to keep AREVA NP afloat after years of heavy losses.
The two companies also agreed to form a joint venture, 80 percent owned by EDF and 20 percent by AREVA, that would concentrate on engineering and marketing of new reactor technology. That venture would also entail construction management for power plant projects.
In January, AREVA and EDF reached a pricing agreement by valuing AREVA's reactor business at $2.7 billion. In July, however, Moody's Investor Service downgraded EDF's senior debt to A2 from A1 and cut its subordinated debt to Baa2, just above junk status. At that time, the downgrades were linked to uncertainty over the Hinkley Point C project, which remained in limbo as EDF reviewed its finances. But AREVA was considered a part of the problem, as well. Moody's warned that EDF taking on AREVA's debts could jeopardize its credit rating even further.