The Japanese government is poised to guarantee the full amount of loans that three megabanks will extend for a nuclear plant construction project in Britain by Hitachi Ltd., sources familiar with the project said.

A group of banks, including the three megabanks and the government-affiliated Japan Bank for International Cooperation (JBIC), will extend approximately 1.5 trillion yen in loans to Hitachi's atomic power station project.

Of the amount, the government will fully guarantee loans to be extended by the megabanks, while the governmental Development Bank of Japan (DBJ) will support the project by making capital investments. Chubu Electric Power Co. and other utilities are also considering investing in the project.

The state will thus join hands with the private sector in extending all-out support for the project to export a nuclear plant worth some 3 trillion yen.

However, concerns have been raised that if the project were to run into the red, taxpayers could be forced to shoulder the burden.

The project to be covered with loans and investments is an atomic power station that a Hitachi subsidiary in Britain is aiming to build in Anglesey, Britain. The firm hopes to start operations at the plant in the mid-2020s.

Hitachi Ltd. is poised to make a final decision on whether to invest in the project by the end of fiscal 2019. However, Hitachi is consulting with the Japanese and British governments and financial institutions over loans, their guarantees and investment on the grounds that the electronics giant alone cannot take risks.

Japanese financial institutions and the governmental Nippon Export and Investment Insurance (NEXI) offered in December last year to extend financial assistance for the project.

According to the sources, Hitachi estimates the total cost of the project at about 3 trillion yen. Hitachi aims to obtain about 1.5 trillion yen in loans to cover half of the amount while raising another 1.5 trillion yen through investments.

Each of the three megabanks -- the Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corp. and Mizuho Bank, Ltd. -- intend to extend loans of more than 100 billion yen, totaling some 500 billion yen. NEXI will guarantee the loans. Hitachi intends to obtain the reminder of the loans from the JBIC and commercial financial institutions in Britain.

The DBJ has notified Hitachi of its intention to make capital investments in the atomic power station project, while Chubu Electric Power and Japan Atomic Power Co. are also considering investing in the venture.

Hitachi has also asked other utilities including Tokyo Electric Power Co. and trading houses to invest in the project in a bid to disperse risks involving the project.

The British government, which is speeding up the construction of nuclear plants, also intends to invest in the project, and Japanese and British Cabinet ministers in charge of energy policy exchanged a memorandum on cooperation in December last year.

The profitability of nuclear plant construction has been worsening all over the world due to an increase in the costs of ensuring safety since the outbreak of the Fukushima nuclear crisis in March 2011, contributing to the financial crisis of Toshiba Corp., another electronics giant.

Nevertheless, the government intends to extend all-out support for the project.

"It's essential to win a contract on the British project in order to maintain Japan's nuclear technology," said a high-ranking official of the Economy, Trade and Industry.