Government commits £100m to Sizewell C nuclear project

Energy giant EDF’s plan to build the £18bn Sizewell C nuclear power station in Suffolk has been backed by £100m of government funding.The public cash injection will help EDF finance the continued development of the project as it seeks further funding from private investors.In return for the support, the government will receive certain ownership rights.This would be an equity stake in the development company behind the project and over the land on which EDF plans to build it.If EDF can secure enough investor backing to make a final investment decision on Sizewell it would reimburse the government with a stake in the project or in cash.Ministers have made a commitment to reaching a final investment decision on at least one large-scale nuclear power station this parliament.Sizewell, which is still going through planning and development, would power 6 million homes, as well as supporting up to 10,000 jobs in Suffolk and across the UK.If the project does not reach this important milestone, then the government would ask for either the Sizewell C company shares or the Sizewell C site or, if EDF is unable to provide these assets as requested by government, the money will be refunded by EDF together with a financing return.The announcement comes as the Nuclear Energy (Financing) Bill, which will enable a Regulated Asset Base (RAB) funding model framework for new nuclear projects, passes through Parliament.It is estimated that RAB could lower the cost of a large-scale nuclear power project by more than £30bn, compared to Hinkley C’s contracts for difference model.The RAB model would reduce Britain’s reliance on overseas developers for finance by substantially widening the pool of private investors to include British pension funds, insurers and other institutional investors from like-minded countries.