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Toshiba to pay $2.168bn compensation to quit U.S. nuclear power project

Staff Writer |
Toshiba has agreed to pay $2.168bn as compensation for quitting from fulfilling a contract to build two nuclear reactors for a U.S. project owned by South Carolina Electric & Gas Company (SCE&G) and Santee Cooper.

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The Japanese firm’s subsidiary Westinghouse Electric was given the engineering, procurement, and construction (EPC) contract for the units to be installed for the V.C. Summer Nuclear Station being built in Jenkinsville, South Carolina.

However, Westinghouse Electric went bankrupt in March which also affected the Vogtle nuclear expansion project in Georgia where Toshiba has agreed to pay $3.68bn as parental guarantees.

According to SCE&G, the principal subsidiary of SCANA and state-owned utility Santee Cooper, Toshiba will make installment-based payments from October 2017 until September 2022.

SCE&G will get a payment of $1.192bn reflecting its 55% stake in the project, while Santee Cooper will be paid $976m for its 45% ownership.

Under the terms, Toshiba has agreed to pay the amount regardless of whether both or any of the nuclear units are completed, or even if the project is called off totally.

As per the parties, Toshiba will be entitled to be paid an appropriate sum if the specified maximum amount it has to pay is more than the actual construction costs following the completion of the two nuclear units.

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