Sizewell C on the Suffolk coast in eastern England, the world’s first nuclear power project to be privately financed, has reached financial close. The total estimated cost for the project is £38 billion ( US$50 billion ).

Following the conclusion of an equity raise and final investment decision in July, £5 billion of debt has been raised through a Bpifrance Assurance Export ECA credit facility, along with a £500 million working capital facility and a term loan from the UK National Wealth Fund.

The 13 lenders on the BpifranceAE debt facility are: ABN Amro,  Banco Bilbao Vizcaya Argentaria ( BBVA ), Santander CIB, BNP Paribas, Crédit Agricole Corporate and Investment Bank, CaixaBank, Citibank, Crédit Industriel et Commercial ( CIC ), HSBC Bank, Lloyds Bank, National Westminster Bank, Natixis, and Société Générale.

Clifford Chance advised Sizewell C on all aspects of the transaction, including the revenue model and government support package, equity capital raise, and debt financing. Linklaters advised the UK government.

Capital raise

Rothschild & Co acted as lead financial adviser across equity, debt, and credit ratings, while 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 export credit-backed facility.

A subset of the bank lenders is providing the working capital facility, which has received investment-grade ratings from Moody’s, S&P, and Fitch. Sizewell C achieved these ratings by demonstrating a range of strengths, including the company’s strong financial structure and replication benefits from the under-construction Hinkley Point C in Somerset, southwestern England, which will reduce costs and risks.

The BpifranceAE debt facility has further refinancing support from French public development bank Sfil, a unit of Caisse des Depots. It is a green loan in accordance with Sizewell C’s green financing framework. S&P Global Ratings has provided the facility with the second-highest rating, “medium green”, for green financing through its analysis of the sustainable finance instruments.

Sizewell C, the first British majority-owned nuclear power station in decades, is backed by investors including the UK government, Canadian investment fund La Caisse, Centrica, EDF, and funds advised or managed by Amber Infrastructure Group, including International Public Partnerships and the Nuclear Liabilities Fund.

Once operational, the plant could create savings of £2 billion a year.

Innovative model

The Regulated Asset Base ( RAB ) model used in Sizewell C has already been used in over £200 billion of infrastructure projects, including Heathrow Terminal 5 and the Thames Tideway Tunnel. It lowers financing costs by allowing regulated revenues during the construction, with inflation-adjusted returns from the first day of investment.

According to the UK government, Sizewell C’s financing model attracts private investment that would not otherwise be possible, and has attracted considerable interest from other countries with nuclear power development plans.

“The successful equity and debt raise, and the strong investment-grade credit ratings underscore the project’s solid foundations and innovative financing model,” comments Emmanuel Jaclot, executive vice-president and head of infrastructure and sustainability at La Caisse.

Simone Rossi, chief executive of EDF UK, adds: “The success of the debt and equity raising for the financing of Sizewell C highlights the market confidence in nuclear technology for the energy transition.”[CH1] 

Photo: Sizewell B nuclear power station, next to the site of Sizewell C.