Blow to Government’s infrastructure drive as two top UK pension funds snub Sizewell C nuclear plant plan
Efforts to attract investment in British infrastructure were hit after two of the UK’s biggest pension funds turned their backs on Sizewell C.
Ministers are tearing up old EU red tape that Chancellor Jeremy Hunt says will unlock £100billion in possible funding for major projects.
The most important of these is the £20billion Sizewell C nuclear power plant in Suffolk, which is being developed by the Government and EDF but will need billions of private funding.
Ministers are tearing up old EU red tape that Chancellor Jeremy Hunt says will unlock £100bn in possible funding for projects such as the £20bn Sizewell C nuclear power plant in Suffolk
But two of Britain’s biggest pension funds – the BT Pension Scheme and NatWest – have told campaign group Stop Sizewell C and the Daily Mail they do not intend to back the project.
The Government has spent years trying to woo pension groups and institutional investors by introducing a new funding model that allows them to receive dividends during the construction process.
It is expected to go a step further by classifying nuclear as a green energy source in an upcoming eco-friendly financing strategy, which would make it easier for companies to win support to invest in power plants.
But an industry source said Sizewell C would still not be an appropriate investment for ‘typical big-name UK pension schemes’, as they see the risk of cost over-runs and delays being too high.
So far, other potential backers such as Nest and Legal & General have said they do not intend to fund the project.
But British Gas owner Centrica is thought to be considering taking a stake, while FTSE 100 savings and retirement firm Phoenix Group has said it is keen to back nuclear.
The source added that funding was more likely to come from North America and the Middle East, with Emirati sovereign wealth fund Mubadala already said to be in the mix.