Backing demonstrates depth of support for pioneering financing model, says project company
Full-scale construction of the planned Sizewell C nuclear project in the UK is set to begin with all necessary financing now finalised and available for the two-unit facility in southeast England.
Project company Sizewell C said the planned nuclear station, which has an estimated cost of £38bn (€43bn, $49.5bn), reached financial close on 4 November, indicating that all funding will now be able to flow into the major infrastructure project.
Sizewell C concluded an equity raise this summer and has now confirmed it has secured a further £5.5bn through debt and loan arrangements.
In July Sizewell C announced the successful conclusion of a £38bn equity raise and a final investment decision. The company has now confirmed £5bn of debt raised through the BpifranceAE export credit facility and a £500m working capital facility, both sitting alongside a term loan from the National Wealth Fund, a public investment institution.
Thirteen banks have supported the £5bn debt raise and a subset of these are providing the working capital facility.
Sizewell C the backing demonstrated the depth of support for its pioneering financing model.
Sizewell C is the first nuclear power project to be financed using the UK’s Regulated Asset Base (RAB) model.
RAB is a financing mechanism for large-scale infrastructure projects that provides a guaranteed, regulated return on investment for developers during the construction and operational phases of a project.
By attracting private investment through this model, it aims to lower the cost of capital and reduce costs for consumers. Funding is secured through a levy on electricity bills, which allows consumers to contribute to the project during construction, helping to manage costs and interest on loans.
For its most recent nuclear project at Hinkley Point C the UK used a contracts for difference (CfD) model. CfD sees developers finance the entire construction cost up front, and only began receiving revenue when the station starts generating electricity.
This model led to the cancellation of potential projects, such as Hitachi’s project at Wylfa Newydd in Wales and Toshiba’s at Moorside in Cumbria.
Under the RAB scheme, private investors receive greater certainty through a lower and more reliable rate of return in the early stages of a project.
“This landmark moment sees funding for the project beginning to flow, unlocking full-scale construction of the Suffolk-based plant, which, once operational, could create savings of £2 billion a year across the future low-carbon electricity system – leading to cheaper power for consumers,” Sizewell C said.
The company, the first British-majority owned nuclear power station in decades, is backed by major investors including the UK government, La Caisse, Centrica, EDF and funds advised or managed by Amber Infrastructure Group, including International Public Partnerships and the Nuclear Liabilities Fund.
Industry Welcomes ‘Landmark Moment’
Once operational, the station’s two France-supplied EPR units will power six million homes for at least 60 years and according to the government could save the electricity system £2bn a year by cutting dependence on imported gas.
The project, majority-owned by British investors, is also expected to generate more than 10,000 skilled jobs and 1,500 apprenticeships, with 70% of contract value going to UK businesses.
The UK nuclear industry welcomed the development. Tom Greatrex, chief executive of the London-based Nuclear Industry Association, said reaching financial close for Sizewell C is a landmark moment for the UK’s clean energy future.
“It proves that new nuclear can attract significant investment – a vital step towards energy security, skilled jobs, and achieving net zero,” he said.
“The financing model used for Sizewell C is crucial to unlocking further private investment in new nuclear projects, cutting our reliance on fossil fuels, and driving an industrial revival across Britain.”
Since 2000, the UK has seen permanent reactor shutdowns at Hinkley Point A, Bradwell, Calder Hall, Hunterston, Oldbury, Sizewell, Chapelcross, Dungeness and Wylfa, leaving only nine units in commercial operation and only Hinkley Point C’s two EPRs under construction.
The UK already has two EPR units under construction at Hinkley Point C. Courtesy EDF Energy.
