China vowed Wednesday to take a one-third stake in Britain’s first nuclear power plant in decades, with Prime Minister David Cameron hailing an “historic deal” on the project led by French energy giant EDF.

The announcement came on the second day of Chinese President Xi Jinping’s business-themed state visit to Britain, which Cameron said had seen deals signed worth £40 billion (54.6 billion euros, $61.9 billion).

EDF in a statement announced the blockbuster nuclear agreement, signed in the presence of Xi and Cameron, as London rolled out the red carpet to Chinese investors and showcased joint projects including zero-emission classic London red buses and black taxis. The agreement for the gigantic nuclear project, whose construction costs total £18 billion, is expected to be finalised in the next few weeks.

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British Prime Minister David Cameron (R) shakes hands with Chinese President Xi Jinping during a commercial contract exchange at the UK-China Business Summit in Mansion House, central London, on October 21, 2015 Photo: AFP/Leon Neal.

“We’re signing an historic deal to build the Hinkley nuclear power station,” Cameron said at a joint press conference with Xi at Downing Street.

Xi called it “a flagship project of cooperation”.

The French utility will construct two European Pressurised Reactors (EPRs), a third-generation nuclear reactor design considered the most advanced and safest in the world, at the Hinkley Point C plant in Somerset, southwestern England.

Beijing’s state-run China General Nuclear Corporation (CGN) will finance £6.0 billion of the costs, with EDF providing the remainder.

“We have all the conditions now in place, subject to final investment approval in the next few weeks, to go ahead with the project,” Vincent de Rivaz, head of EDF’s British division, said in a telephone conference with journalists.

EDF is the lead contractor with an initial stake of 66.5 percent — which could fall to 50 percent if other investors are brought on board — while CGN has the remaining 33.5 percent.

The Hinkley facility will not be operational until 2025 — two years later than originally planned when the deal was first unveiled two years ago.

The pair also reached agreement on a partnership to develop nuclear power stations at Sizewell, on the eastern English coast in Suffolk, and at Bradwell in Essex, southeastern England.

Britain has placed nuclear at the core of its low-carbon energy policy, in contrast to eurozone powerhouse Germany, which has pledged to phase out nuclear power after Japan’s 2011 Fukushima disaster.

The Hinkley project would create over 25,000 jobs and power six million homes, according to Britain’s Department of Energy and Climate Change.

High costs?

But British opponents of Hinkley complain about the high building costs and the time it will take to generate power, as well as the guaranteed agreed electricity price of £92 per megawatt hour over 35 years.

“Hinkley Point C is likely to be the most expensive power station ever built anywhere,” said Lisa Nandy, energy and climate change spokeswoman for the opposition Labour party.

“I’m deeply concerned about the costs for households, and particularly vulnerable groups like pensioners.”

Hinkley aims to provide seven percent of Britain’s total power needs.

Among other deals announced on Wednesday were a £50 million agreement between carmaker Aston Martin and China Equity to develop a low-emission sports car.

Chinese automaker Geely, which produces London’s iconic black taxis, has also announced a £50 million investment to launch zero-emission-capable cabs.

Bigger deals included oil and gas contracts involving oil major BP worth £12 billion and agreements worth £1.4 billion for engine maker Rolls Royce.

Rights protests

On the first day of the trip on Tuesday about 200 demonstrators booed Xi’s journey to Buckingham Palace with Queen Elizabeth II in a gilded carriage in protest over Beijing’s humans rights record.

Leading Hong Kong pro-democracy activist Joshua Wong, 19, who attended a protest against Xi, told AFP that the prospect of Chinese cash “has blinded the eyes of David Cameron”.

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Hong Kong student activist Joshua Wong. File photo: HKFP.

Cameron has been accused by some observers of kowtowing to China in a bid for investment and the visit comes at a sensitive time as thousands of jobs are being cut in Britain’s steel sector.

The British job losses have been blamed by experts on a range of factors including cheap Chinese imports but also high energy costs in Britain.

See also: HKFP’s interview with Joshua Wong.

The two leaders addressed the issue on Wednesday, with Cameron telling reporters that they had discussed “excess global supply of steel”.

But Xi insisted that China was not solely to blame for the crisis and said Chinese jobs were also at stake.

“The world is facing an overcapacity of iron and steel, not just the UK, this is because of the impact of the global financial crisis,” Xi said at a joint press conference with Cameron through a translator.

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