(Reuters) - European Union state aid regulators are set to approve Britain's 19-billion-euro (£15 billion) plan to build a nuclear plant with French utility EDF, several people familiar with the matter said on Wednesday.
The case is important for Britain, which wants to replace a fifth of its ageing nuclear power and coal plants over the coming decade, and for France, whose nuclear sector would benefit from the major export contract.
Other EU countries such as Germany, which is phasing out nuclear energy, and pro-nuclear Lithuania and Poland are also following the case for guidance on the level of state aid allowed for such projects.
"We can expect some resolution (approval) in the next couple of weeks. The intention is to move forward," said one of the sources, declining to comment on the specifics of the case.
An industry source said EU Competition Commissioner Joaquin Almunia would make a recommendation to his colleagues soon.
"This will be rather positive for the Hinkley Point consortium, but this recommendation will come with a number of conditions," the source said, adding that it would be up to the British government and the EDF-led consortium to decide whether these conditions were acceptable.
"This is the first stage," the source said.
Commission spokesman Antoine Colombani said: "Discussions with the UK authorities are ongoing. The Commission's investigation is not subject to a deadline."
British authorities and EDF declined to comment.
The EU competition watchdog opened an investigation into the project in December last year, worried that the British aid might distort competition and give an unfair advantage to French state-controlled EDF.
Britain wants to give a guaranteed power price of 92.50 pounds per megawatt-hour for 35 years, more than twice the current market rate, to EDF.
The Commission said the guarantee would insulate EDF and its investment partners from the market. The company would also benefit from another state guarantee covering any bank loans taken on to build the Hinkley Point facility.
"MILESTONE CASE"
The Commission's decision had been in the balance in recent months because Britain had not fully addressed the regulator's concerns, which were laid out in a 68-page letter to the British government late last year.
Lawyers at the time said it would be extremely difficult for Britain to address the Commission's long list of issues.
"The case is a milestone both for the pro-nuclear and the anti-nuclear countries," an EU source said on condition of anonymity.
The sources said British authorities were rushing to finalise details of power-price guarantees and state-backed loans for European Competition Commissioner Joaquin Almunia before he leaves office at the end of October.
British Energy Secretary Edward Davey met Almunia earlier on Wednesday to discuss the case. Sources said London had sent a team of officials to Brussels to work on the case after being told to submit final data to the Commission by the end of next week.
"If they don't (submit the information), the case won't be resolved under the current Commission. Then it won't be looked at until January," the person said.
The EDF-led consortium plans to build two Areva-designed 1,650 megawatt European Pressurised Water Reactors that will produce about seven percent of British electricity needs and will operate for 60 years.
EDF's long-time Chinese partners, China General Nuclear Corporation (CGN) and China National Nuclear Corporation (CNNC), will take a combined 30-40 percent stake in the consortium, while Areva will take 10 percent.
Areva declined to comment, while the Chinese companies were not immediately available to comment
Green politicians and environmental campaigners have said the British financing plan for Hinkley Point cannot be justified either in terms of EU law or value to consumers because of the huge financial cost of nuclear power.
"The proposed deal pays no attention to either European law or the interests of the consumer," said Andrea Carta, EU legal adviser to campaign group Greenpeace. "Furthermore, the government has failed to run a transparent tender procedure, which should lead the Commission to reject the plan."