Some of the most complex financing structures in the world were put in place to pave the way for the development of Hinkley Point C (HPC), a headline-making Chinese-funded nuclear power investment project in the UK, said a lawyer involved in the project.
“The financial viability of HPC is underpinned by a contract-for-differences [CFD] structure, pursuant to which the UK government has agreed on a minimum price for the power that HPC generates so that if prices fall below that level, the project company will receive a top up, which will in effect be funded by all UK users of electricity,” Alex Doughty, a partner at Eversheds in London and one of the team leaders in the project, told China Business Law Journal.
Doughty said HPC is one of the world’s most complex project financings currently underway, and the challenging piece of work involves the development of innovative financing structures. The contract-for-differences will last for 35 years.
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