The Sizewell C project to build two of EDF’s EPR reactors on England’s east coast has reached Financial Close, including GBP5 billion (USD6.5 billion) in export credit financing by BpifranceAE as well as debt financing from the UK’s National Wealth Fund.
France’s EDF, announcing the financial closing of the project, said it would invest a maximum of GBP1.1 billion during the construction period and would have a stake of 12.5%, with the UK government having 44.9%, La Caisse 20%, Centrica 15% and Amber Infrastructure 7.6%.
It added: “EDF will not invest new cash at financial close due to the reimbursement of the development costs incurred since 2015 and a payment in return for the Hinkley Point C project expertise that Sizewell C benefits from, as well as the series effect.”
Thirteen banks have supported the GBP5 billion debt raise: ABN Amro Bank; Banco Bilbao Vizcaya Argentaria; Santander CIB; BNP Paribas; Crédit Agricole Corporate and Investment Bank; CaixaBank; Citibank; Crédit Industriel et Commercial; HSBC Bank; Lloyds Bank; National Westminster Bank; Natixis and Societe Generale.
Sizewell C said “this landmark moment sees funding for the project beginning to flow, unlocking full-scale construction of the Suffolk-based plant”.
The plan is for the estimated GBP38 billion Sizewell C plant to feature two EPR reactors producing 3.2 GW of electricity, enough to power the equivalent of around six million homes for at least 60 years. It would be a similar design to the two-unit plant being built at Hinkley Point C in Somerset, with the aim of building it more quickly and at lower cost as a result of the experience gained from what is the first new nuclear construction project in the UK for about three decades. A final investment decision for the Sizewell C project was taken in July this year.
Sizewell C has used the Regulated Asset Base (RAB) funding model, which will see consumers contributing towards the cost of new nuclear power plants during the construction phase. Under the previous Contracts for Difference system developers finance the construction of a nuclear project and only begin receiving revenue when the power plant starts generating electricity.
Sizewell C said the “financing model attracts private investment that would not otherwise be possible. Government estimates that using the RAB can save consumers GBP30 billion, compared with other models, as a result of lower financing costs”.
UK Energy Secretary Ed Miliband said: “By backing nuclear we are creating thousands of high-quality jobs across the country, supporting British supply chains and keeping the lights on with homegrown energy for generations to come.”
Tom Greatrex, Chief Executive of the Nuclear Industry Association, the trade association for the UK’s civil nuclear industry, said: “Reaching financial close for Sizewell C is a landmark moment for the UK’s clean energy future. It proves that new nuclear can attract significant investment – a vital step towards energy security, skilled jobs, and achieving net zero. The financing model used for Sizewell C is crucial to unlocking further private investment in new nuclear projects, cutting our reliance on fossil fuels, and driving an industrial revival across Britain.”
EDF also noted the wider benefits for the French state-owned group: “The EDF group will contribute to the project as a supplier of engineering studies (EDF/Edvance), the main primary circuit including the nuclear boiler, steam generators and safety control system (Framatome) and, for the conventional island, the turbo-alternator unit (Arabelle Solutions). For the French nuclear industry more broadly with some 40 French suppliers, it will help to perpetuate skills, capitalise on experience and generate economies of scale for the EPR2 programme in France.”
Sizewell C said that Clifford Chance acted as legal adviser, Rothschild & Co acted as lead financial adviser across equity, debt and credit ratings, and BNP Paribas acted as joint debt financial adviser to Sizewell C on the capital raise. HSBC acted as French Authorities and Green Loan Coordinator, alongside Santander CIB as Documentation Coordinator on the GBP5 billion export credit backed facility.
