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The UK government on Monday committed an extra £800mn to a planned £20bn nuclear power plant as ministers seek to attract outside investors to the project.
It means the government has now committed £2.5bn to pave the way for the proposed Sizewell C nuclear power station in Suffolk in south-east England, up from £1.7bn previously.
Sizewell C is being developed by EDF, France’s state-owned utility, and a final investment decision is due later this year.
Andrew Bowie, minister for nuclear, said the latest funding “sends a strong message to investors that Britain is serious about its low-carbon, homegrown nuclear-powered future”.
It comes as the British government and EDF are trying to raise an estimated £20bn from outside investors in debt and equity to build Sizewell C.
Costs of the project are set to be recouped from households’ energy bills during construction.
Bowie told the Financial Times this month he was “very confident” the fundraising would be completed later this year, saying “we are genuinely very pleased and very positive about the reaction we’ve had through the capital-raising process so far”.
The costs, lengthy timeframes, and potential risks of nuclear power mean the pool of potential investors is limited, with sovereign wealth funds or state-owned companies playing a large role in the industry.
Sizewell C is meant to be the second next-generation nuclear power plant to be developed in the UK after Hinkley Point C, which EDF is building in Somerset.
The latter is due to start generating electricity in June 2027, but EDF has warned there is a risk it could be delayed by 15 months.
Britain’s existing fleet of ageing nuclear reactors needs replacing as all but one is due to close down by the end of the decade, although EDF is considering keeping some open for longer than planned.
China’s state-owned China General Nuclear was a minority partner with EDF on Sizewell C but was bought out by the UK government last year in an effort to cut Beijing’s involvement in critical British infrastructure.
Responding to the extra government funds, Julia Pyke, managing director at Sizewell C, said the “significant investment underlines the importance of Sizewell C for Britain”.
The UK government’s £2.5bn of spending on Sizewell C compares to the roughly £700mn that EDF committed to the project in 2022.
As a result of its funding, the UK government became the majority shareholder in Sizewell C in December.