Nuclear plant risks “ignored” by investors – Greenpeace report « Mining Blog

Nuclear plant risks “ignored” by investors – Greenpeace report

12. June 2012,

With the assistance of BankTrack, Greenpeace has released a report which “rebukes the finance sector for ignoring nuclear risks”.

Although carrying a publication date of April 2012, the report wasn’t announced until today. It mirrors allegations, made in a letter to the governor of the Bank of England by high profile “persons” back in January, that “overexposure to high-carbon assets by London-listed companies risks creating a ‘carbon bubble’ (see posting on this blog, 22 January 2012).

According to Greenpeace, “Investors in nuclear power are being sold precarious and potentially damaging investments because the industry’s risks are regularly being overlooked or underestimated”.

The report – “Toxic Assets” – also argues that the value of these investments “is…being gradually eroded by aging plants, growing costs, falling utilisation rates, changing regulations and shrinking government support…”

Referring specifically to the TEPCO Fukushima nuclear plant disaster, the report claims that:“Crucial vulnerabilities in reactor design, major frauds, cover-ups and governance issues; collusion and loose regulatory supervision; and well-understood natural disaster warnings were all ignored and hidden from investors. This is a common and continuing theme, not just in Japan, but globally.

“All of these warnings had been publicly highlighted for years, often decades, before the nuclear disaster, but at best they were never taken seriously by credit agencies, analysts, or regulators. At worst, these alarm bells were ignored and covered up to preserve the false impression that nuclear power is a good investment,” says György Dallos, Greenpeace International Senior Energy Investments Advisor, and co-author of the report.

“Fukushima Daiichi has proven that nuclear power plants are not only
dangerous… These plants can create liabilities that can greatly exceed asset value, yet the scope of a disaster, the risks posed by aging reactors and the higher than assumed probability of a devastating accident are not taken into consideration.”

The report claims that “dozens of banks” provided TEPCO with at least €54bn of low-cost capital through bond issues, corporate loans and a share issuance between 2000 and 2011”.

Bond issues provided most of this funding, among which, Citi, Mizuho, Nomura, Sumitomo Mitsui, Mitsubishi UFJ, BNP Paribas, Deutsche Bank, Merrill Lynch (Bank of America), Daiwa Securities, Morgan Stanley and Goldman Sachs were the largest bond-underwriters. *

“The potential for similar catastrophic nuclear disasters and disastrous investment decisions is not limited to TEPCO or Japan” says Greenpeace..

“Nuclear power plants are potentially toxic assets for their investors and financiers. Quite uniquely, they can give rise to liabilities that can exceed their ownerʼs equity a hundred-fold or more. The probability of a devastating accident is around one major disaster in a decade based on the five core meltdowns since the 1950s…”

To download the report, go to:
www.greenpeace.org/international/toxicassets

* Further detail on Banks listed in bold typeface can be found at:
http://moneytometal.org/index.php/A_data_base

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