Britain’s main nuclear plant could face greater dependence on foreign money after a number of big-name City companies turned down the chance to finance the project.
Phoenix, Abrdán and Aviva had all said they would consider supporting new nuclear plants and were thought to be in the race to back Sizewell C in Suffolk.
But they have now all said they are not in talks to take an equity stake in the power station, according to emails sent to the Stop Sizewell C campaign group and seen by The Mail on Sunday.
This is a blow to ministers who spent years changing the funding model for massive infrastructure works to attract city investors such as Phoenix and Aviva. The model, known as a regulated asset base, allows investors to receive dividends on projects still under construction.
Sizewell C has been hit by delays for years and the Government has yet to finally decide whether it will go ahead.
Snub: Phoenix, Abrdn and Aviva had said they would consider supporting new nuclear plants and were thought to be in the race to back Sizewell C.
A number of pension funds, including BT, NatWest and Nest, have ruled out backing the plant, which will cost at least £20bn. Alison Downes of Stop Sizewell C said: ‘The Government has spent years planning and legislating to enable the funding model for Sizewell C, with the aim of attracting UK pension funds. The strategy has not been successful, which is not a surprise considering the many uncertainties, including the actual cost of the project.’
In January, the Government committed a further £1.3bn of funding to Sizewell C, which will go towards the first construction works.
Six groups are in talks with the Government about funding the project, and at least one is understood to be from the Emirates.
British Gas owner Centrica is also believed to be in the frame.
Pressure is mounting after EDF this year began lobbying the Government to help fund cost overruns at Hinkley Point C in Somerset. The French utilities group said the price of that plant, which is of the same type planned for Sizewell C, could reach £46bn from an initial estimate of £18bn. The Suffolk plant could power six million homes for 60 years, but would take nine to 12 years to build.
Ministers have also backed programs to install small nuclear reactors, especially a company led by Rolls-Royce that designs these easy-to-assemble plants.
Industry sources say they will likely be more attractive to investors as they are faster and cheaper to build.