This episode features World Nuclear Association's Lola Infante, Senior Programme Lead Economics and Finance, and David Stearns, nuclear finance advisor and consultant.
They consider why nuclear projects have generally been state-financed in the past, and what the industry needs to do to ensure that it attracts private finance for future schemes. There is discussion of the growing appetite by global investment banks and multilateral banks to invest in new nuclear and also the challenges of structuring financing to ensure it is attractive despite the long timescales involved in planning, building and then operating a new nuclear power plant.
Stearns says the current appetite to invest in nuclear is "absolutely massive" but there is on-going work needed to tackle the circular issue of the industry wanting to get fleet orders, and financiers wanting to see a "bankable project structure and cost and schedule certainty".
He says there needs to be "financing by design" where, as Stearns puts it, "you embed and you write the financial coding at the same time that you're doing your site assessment, at the same time that you're checking your early stage regulatory approvals".
Infante says there is nothing necessarily more difficult with a new nuclear project than with other large infrastructure projects. However, in those countries which have not built plants in the past few decades, "the financial and nuclear communities haven't had the opportunity to develop frameworks and models that will allow them to reach quick investment decisions".
She says that helping to facilitate conversations which can help develop those investment models has been one of the aims of World Nuclear Association's Financing Nuclear Briefing series, which brings the nuclear industry and financiers together under Chatham House rules.
Stearns says that nuclear - and other large-scale infrastructure projects - needs to be looked at in stages, with different investors willing to enter and exit at different stages, and with clarity over their conditions for entering and exiting the project.
Infante says that the required capital expenditure up to 2050 "may sound like a lot, but it isn't .. people talk about it as a challenge but I think it is an investment opportunity ... to put it in perspective, in the US alone, utilities are already investing around USD200 billion a year ... in 2024 around the world USD2 trillion was spent on clean energy investments, so, really, USD200 billion to USD300 billion a year is not as scary a number as it sounds".
Fourteen major banks and financial institutions have signed up to the pledge to aim to at least triple nuclear capacity by 2050 with some more likely to follow, she says - "not only are they investing and interested in the sector they're actually signing a pledge to help the industry get to that goal - so what we need to do now, is anything we can to make sure that projects get to final investment decisions as soon as we can. Speed is the name of the game at this point, de-risking projects and information exchange and developing replicable models and frameworks".
The potential role of multilateral banks is also likely to be key, says Stearns, who points out they can take the 100-year view on investments, which governments and other financiers may not be able to. They can take the socioeconomic view of a particular infrastructure class, knowing that a nuclear power plant can create jobs, economic growth, skills and graduate training over the very long term, as well as drawing in foreign direct investment.
Key links to find out more:
Financing Nuclear Briefing Series
Investment decisions needed to avoid fuel cycle supply gaps
'Difficult to overstate demand from institutional investors' for nuclear
International banks express support for nuclear expansion
World Nuclear Symposium
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Contact info:
alex.hunt@world-nuclear.org
Episode credit: Presenter Alex Hunt. Co-produced and mixed by Pixelkisser Production
Cover Picture: Thomas Breher/Pixabay
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