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“Davey had to reassure Li the EU will not veto the project”
Ed Davey will have been on his best behaviour this week as the UK entertained Chinese premier Li Keqiang.
Having ironed his best shirt and polished his smartest shoes, Davey will have met premier Li, China’s second most senior politician, and discussed trade and investment.
For “trade and investment”, read Hinkley Point C.
The new nuclear project, which is still waiting for state aid approval from the EU, will be largely financed by the Chinese.
Davey had to be seen to reassure Li and the Chinese money men that the EU will not veto the project – leaving the UK with the investors, but nothing to invest in.
Despite the European Commission’s scathing remarks about the subsidy, the contract for difference with EDF and the way it appears to fall foul of the EU’s state aid rules, Davey had to put on a brave face.
The UK energy secretary has said he is confident the Commission will make its decision by October – but he had to convince Li the decision will be in their favour.
If not, there will be a black hole in both Hinkley Point C’s construction budget and in the UK’s future generation capacity.
It all comes down to – in the immortal words of Benny Andersson and Björn Ulvaeus – money, money, money.
EDF does not have the available capital to fund the £16 billion development itself, so it needs substantial backing from those who do.
And those who do are the Chinese.
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