UK attracts Saudi and Emirati investors as it struggles to introduce nuclear investment fund

The UK is approaching foreign investors to fill the funding gap for Sizewell C as the government struggles to draw attention to nuclear investment, A generation can be disclosed.

In his last major policy speech as Prime Minister, this week Boris Johnson announces £700m funding for nuclear programme In Suffolk, his successor was urged to “denuclearise, go big and go with Sizewell C”.

But the scheme, estimated to cost more than £20bn, is struggling to attract interest as interest in nuclear investment wanes.

The UK is expected to plan to take a 20% stake in Sizewell C and French firm EDF will hold another 20% – 60% of the project needs investors.

Chinese government-backed investors have provided a substantial stake in Hinkley Point C, a nuclear power plant in Somerset, modelled on Sizewell C, which will initially provide substantial investment.However, Sino-British political relations have deteriorated leading the government to seek funding elsewhere.

Barclays and Rothschild have been hired to help the UK fill the remaining stake, but A generation It is understood that negotiations between Barclays and potential investors have not yet begun, and the investment is still in the preparatory stage.

UK has approached investors from UAE, Australia and Saudi Arabia to boost financial support, sources say A generation.

An industry source said the Emirates Nuclear Energy Corporation (ENEC) was “absolutely interested” and had visited the UK to discuss nuclear cooperation, with further meetings planned for this month. A government source confirmed that talks have been held with ENEC and will continue.

ENEC is believed to be keen to expand the start-up of the Barakah Power Plant in Abu Dhabi, the UAE’s first nuclear power plant.

Another source said Rothschild had also approached Australian bank Macquarie and was given an introduction to Sizewell C.

Investing ‘not as easy as 10s think’

One financial source said securing investment had proved “not as easy as No 10 had envisioned” and that not many Western foundations were involved in nuclear energy.

It is understood that many investors are reluctant to invest in Sizewell C due to economic considerations as well as ESG (environmental, social and governance) issues such as what to do with nuclear waste.

Dr Paul Dorfman, a nuclear energy expert at the University of Sussex, said “the market has escaped nuclear”.

He added: “There is no nuclear construction without massive public subsidies. The market is saying no to nuclear because it’s totally uneconomical and doesn’t make economic sense. It’s very expensive, the learning curve is completely static, and the renewables market has collapsed. Last year, 84% of all new electricity capacity added globally was from renewables, but nuclear power gained none.

“Whatever Johnson says about the plan, the fact is that they raised another 60 per cent from institutional investors and still got nothing.”

Dr Dorfman also warned that the high cost overruns often involved in nuclear power also discouraged investors, suggesting the true cost of Sizewell C could reach £42bn.

Jérôme Guillet, who has worked in the energy sector for 25 years and was previously managing director of renewable energy financial consultancy Green Giraffe, said private investment in nuclear electrodes is difficult, renewable energy is now cheaper and infrastructure is being built faster.

“Nuclear energy has become too expensive” due to high safety and financing costs, he said.

He added that investment may only come from companies already involved in nuclear energy, such as EDF, or those with political interests, such as Chinese companies – and the funds may never be raised.

“My personal opinion is that this plant will never be built. Delay to Flamanville [a nuclear project in northern France] Hinkley Point will push any decision into the future, when a decision can be made, enough offshore wind has been built to make the issue moot. “

But Sizewell C insisted the project “scores very well on ESG criteria” and said green bonds from other nuclear power plants around the world were oversubscribed.

It claims to have “a long list of investors lining up behind the project” and insists it “can provide long-term, reliable inflation-linked returns on investment”.

In a statement, Sizewell C said it was “making tremendous progress, with the Nuclear Financing Bill overwhelmingly passed Parliament this year alone, a Development Consent Order (DCO), progress on environmental and site permits, and nuclear energy at the core. Government’s energy security strategy.”

There are also concerns over EDF’s track record, which should provide one-fifth of Sizewell C’s financial backing. The company is currently in debt of more than £40bn, half of its nuclear reactors are offline and will be nationalised by the French government.

Sizewell C dismissed EDF’s concerns, insisting it “remains committed” to the project.

Sizewell C will rely on UK energy consumers

UK plans to operate a Sizewell C’s regulated asset base (RAB) model, which will see it receive regulated payments from electricity suppliers. This will be the first time a nuclear project has used the RAB model.

But experts say the pattern is Essentially shifting the burden to energy consumers, then Bill payers are already squeezed by the cost of living crisis.

Dr Dorfman, chairman of the Nuclear Advisory Group, said the model “tends to encourage institutional investors because they are slightly more protected because the hard-working, suffering public is going to be substantially hit”.

The government acknowledges this will increase costs for homes, but insists it will only increase “a typical home energy bill by a few pounds a year” in the early stages of construction, and around £12 a year over the construction phase.

It shows the project could save households £10 a year over the life of Sizewell C due to the scheme’s lower overall financing costs, while Sizewell C claims the RAB model will “reduce costs for consumers and create a unique opportunities, such as as pension funds, insurance companies and other institutional investors.”

A spokesman for the Department of Business, Energy and Industrial Strategy said: “As the Prime Minister said, the Government is fully committed to promoting energy security in our country through nuclear power.

“Nuclear energy plays a key role in our efforts to reduce our reliance on fossil fuels and the risks of volatility in global gas prices.

“Our UK Energy Security Strategy sets out the steps we are taking to increase the UK’s affordable homegrown electricity supply. This includes approving plans for eight new nuclear reactors by 2030 and increasing the UK’s nuclear power capacity to 24GW by 2050 .”

Rothschild declined to comment on its role in the project. ENEC did not respond to a request for comment.