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UPDATE 1-UK agrees finance guarantee deal for nuclear project

(Adds finance minister, NuGen comments, details)

LONDON, Dec 2 (Reuters) - Britain said on Tuesday it had agreed a preliminary deal to provide a financial guarantee to help fund the development of Europe’s largest nuclear power project, in northwest England.

The 3.4-gigawatt Moorside project, a joint venture between Japan’s Toshiba and France’s GDF Suez, could provide nearly 7 percent of Britain’s projected electricity needs and create up to 21,000 jobs, the companies say.

“The Guarantee Scheme is another way in which we can help companies to make the huge investment that building new nuclear power involves,” Finance Minister George Osborne said in a statement.

The scheme, which was introduced in 2012, is set to help the Moorside developers gain external project finance to cover the upfront costs of building a nuclear plant.

NuGen, the name of the Toshiba/GDF Suez joint venture, welcomed the agreement.

The Moorside plant will be powered by three nuclear reactors by the end of 2026 to be provided by Toshiba’s Westinghouse unit, with the first reactor expected to start operating by the end of 2024.

NuGen said it plans to make a final investment decision for the Moorside project in 2018.

Britain is counting on replacing its ageing fleet of nuclear reactors with new stations. The government is already providing loan guarantees to France’s EDF for a 16 billion-pound nuclear plant due to be built in southern England. (Reporting by William James and Karolin Schaps; editing by Robin Pomeroy and Jason Neely)

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