The AFCR is a 700MW class generation III reactor which is designed based on the Candu 6 and Enhanced Candu 6 (EC6) reactors.

It uses recycled uranium or thorium as fuel from existing reactors to generate electricity.

As part of the new deal, the firms will form a new Joint Venture, which will be registered in China in mid-2017.

The new agreement, which is subject to all government and regulatory approvals, follows the signing of a framework agreement between the firms in 2014.

The new joint venture company will launch two design centers, one each in Canada and China, in order to complete the AFCR technology.

SNC-Lavalin expects the work to result in construction of the world’s first two AFCR in China.

SNC-Lavalin Power president Sandy Taylor said: "This is a game changer in the nuclear industry, and a great endorsement of our expertise and CANDU nuclear technology from the largest nuclear market in the world.

“Each new build in China, and anywhere in the world, will benefit Canada in terms of job creation, innovation and nuclear research & development, environmental stewardship, and will contribute to reduce global carbon emissions.”

The AFCR is designed to use recycled-fuel from four light-water reactors (LWRs) to generate 6MWh of additional carbon-free electricity. It also eliminates the need for new natural uranium fuel.

Capable of generating new electricity required to power four million Chinese homes, the technology is expected to reduce 6 million tons of CO2 emissions annually.

At present, China operates more than 33 LWR nuclear power reactors while 23 LWRs are under construction.

SNC-Lavalin Nuclear chief nuclear officer and executive vice-president Preston Swafford said: “Recognized globally to deliver safe, reliable, affordable and low-carbon energy, each AFCRTM would contribute to Canada’s commitments within COP21: to increase accessibility, efficiency and affordability of clean nuclear energy.”

The Candu reactors, which can be refueled on power, are said to have one of the highest lifetime capacity factors compared to other reactors.