Energy secretary Ed Miliband has today signed the final investment decision for Sizewell C.
The UK government has agreed deals with international investors to finance construction of the new nuclear power station at Sizewell in Suffolk.
The UK state will own a 44.9% stake, making it the single biggest equity shareholder but not in total control of the project.
Other shareholders include Canadian investment fund La Caisse with 20%, British energy company Centrica with 15%, French energy company EDF with 12.5% and US investor Amber Infrastructure with 7.6%.
The project will be supported by a 拢5bn debt guarantee from France鈥檚 export credit agency, Bpifrance Assurance Export, to back the company鈥檚 commercial bank loans.聽
The UK National Wealth Fund 鈥� the government鈥檚 principal investor and policy bank 鈥� will provide the majority of the project鈥檚 debt finance, working alongside Bpifrance Assurance Export.
The Regulated Asset Base (RAB) funding model that is to be used 鈥� like for the Thames Tideway sewer project 鈥� allows for a rate of return to be earned by investors during construction by adding levies to households in England, Scotland and Wales and some businesses, thereby moving risk onto consumers rather than investors.
The total equity and debt finance made available exceeds the 拢38bn target construction cost (2024 prices), to safeguard against overruns.
That 拢38bn聽target construction cost is around 拢10bn 鈥� or 20% 鈥� below the expected cost of the virtual replica Hinkley Point C that is currently under construction in Somerset, billions over budget and years behind schedule.
Sizewell C was projected to cost around 拢20bn when its planning application was submitted in May 2020, and that was聽total cost (i.e. including planning, legal and land acquisition/access), not just for construction.
Energy secretary Ed Miliband said: 鈥淚t is time to do big things and build big projects in this country again and today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come. This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good.鈥�
Julia Pyke, joint managing director of Sizewell C, said: 鈥淥ur plan is to deliver Sizewell C at a capital cost of around 拢38bn. Our estimate is the result of very detailed scrutiny of costs at Hinkley Point C and long negotiations with our suppliers. It has been subject to third-party peer review and has been scrutinised by investors and lenders and has been subject to extensive due diligence as part of the financing process. A capital cost of 拢38bn represents around 20% saving compared with Hinkley Point C and demonstrates the value of the UK鈥檚 fleet approach.鈥�
Co-managing director Nigel Cann added: 鈥淎ny infrastructure project of this scale will face risks and potentially disruptive events outside of its control, as well as opportunities to reduce costs. Our supply chain is strongly incentivised to keep costs down and our investors will lose potential revenue if there are overruns.鈥�
The government has already announced that the major contractors currently working on Hinkley Point C will be kept on for Sizewell C. They are Bouygues and Laing O'Roukre, in joint venture as Bylor, and Balfour Beatty.
Enabling works construction is already under way on the site in Suffolk. At its peak, the project will directly support 10,000 jobs with up to 60,000 more in the supply chain.
No date has been given for the start of main construction work, nor for a target completion date.聽
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