By Jaime Llinares Taboada

 

The U.K. government said Thursday that it will provide 100 million pounds ($135.1 million) of funding for a project to build a new nuclear plant in Suffolk, in the east of England, which is being developed by Electricite de France SA.

The Department for Business, Energy and Industrial Strategy said the funds will be used to continue the development of Sizewell C, attracting further financing from private investors and potentially the U.K. government.

EDF said the money will help it move the project to a final investment decision.

The aim is to bring the project into maturity, attract investors and advance to the next phase in negotiations. In return for the funding, the government is taking rights over the Sizewell C land and shares in the project's holding company. The British government said the money will be returned to taxpayers whether the project proceeds or not.

"The funding announced today will further support the development of Sizewell C during this important phase of negotiations as we seek to maximize investor confidence in this nationally significant project," Business and Energy Secretary Kwasi Kwarteng said.

Prime Minister Boris Johnson committed in 2020 to bring at least one large-scale nuclear project to a final investment decision.

The proposed Sizewell C project would see the construction of a nuclear power station with a generation capacity of 3.2 gigawatts--enough to power the equivalent of around 6 million homes--next to the existing 1.2-gigawatt Sizewell B plant.

The U.K.'s current nuclear capacity in operation is around 6.8 gigawatts, generating around 20% of the country's total electricity output, according to the World Nuclear Association.

"In light of high global gas prices, we need to ensure Britain's future energy supply is bolstered by reliable, affordable, low-carbon power that is generated in this country," Mr. Kwarteng said.

One of the biggest concerns regarding Sizewell C is about funding, since its construction is expected to cost around GBP20 billion. The British government has proposed a nuclear financing bill to enable a Regulated Asset Base funding model for these projects, which allows the developer to charge a regulated price to consumers. The government says this model would lower capital costs and reduce reliance on overseas developers for finance.

 

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

 

(END) Dow Jones Newswires

January 27, 2022 02:14 ET (07:14 GMT)

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