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Sweden offers state loans to build new nuclear reactors

Sweden offers state loans to build new nuclear reactors

The Swedish government proposed Thursday state loans and guarantees of power prices to help companies finance the construction of four nuclear power plants as part of its strategy for increasing electricity output and reducing carbon dioxide emissions.

The Swedish government said that the Nordic country could need up to 10 large nuclear reactors in 2045, as industry and transport move away from fossil fuels. Demand for electricity will also increase to 300 terawatt-hours (TWh), from 135 TWh by 2023.

The government is now willing to finance the construction costs estimated by previous studies at 10s of billions dollars.

The right-wing government said it aims to attract the required investment by offering state loans as well as a contract-for-difference power price mechanism expected to boost producers' income, but declined to give specific cost estimates.

Niklas Wykman, Minister of Financial Markets, said that the proposal was a well-balanced and responsible way to support something we haven't done in a long time: build new nuclear reactors.

He added, "It's also our opinion that this is the best way to gain a broad-based approval from the European Commission."

EU member states must obtain approval from the Commission to use state aid to finance new nuclear power plants.

According to the government, applications for funding can start as early as August of this year.

Vattenfall is a state-owned utility that hopes to build a nuclear reactor in the mid-2030s. It said it was pleased with the proposal of the government and would examine the details.

Fortum, a Finnish utility, said on Monday that it would not be commercially feasible to build new nuclear capacity without government support.

The nuclear reactors in Sweden were built between the 1970s-80s. (Reporting and editing by Louise Rasmussen. Terje Solsvik, Susan Fenton, Terje Slsvik)

(source: Reuters)