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Giant pensions group Phoenix considers investing in nuclear, but wary of the financial risks

One of Britain’s biggest investors is preparing to back the
Government’s plans for a nuclear renaissance, but only if ministers
overhaul the funding model that previously led to the collapse of proposed
power stations. Andy Briggs, chief executive of pensions giant Phoenix
Group, said he has been in talks with the Government about investing in
nuclear power infrastructure and is exploring how it could support the
creation of new plants.

His support is unusual for the industry, with
pension companies traditionally avoiding nuclear because of the huge
up-front costs involved. However, Mr Briggs also warned that ministers need
to give private sector investors greater clarity on returns around the
investment if the FTSE 100 company is to back future projects. He said:
“We’re in ongoing dialogue regularly [with Government] on this. To
date, we haven’t made significant investments into nuclear, [but] it’s
something we would consider.”

Under the new proposed model, companies
building plants would be paid during the construction phase, cutting down
their development risk and allowing them to secure cheaper financing. Mr
Briggs said: “There’s definitely risks associated with it so we would
need to be comfortable that there’s a robust and safe model around it. It
seems to us likely that it will form part of the [energy] solution going
forward provided it’s done safely and sensibly. “It’s about getting
clarity on the model around it…but it’s definitely an area of potential
interest where there may be attractive returns in long-term, illiquid
assets.”

 Telegraph 2nd Oct 2022

https://www.telegraph.co.uk/business/2022/10/02/pension-titan-vows-back-nuclear-power-renaissance/

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October 2, 2022 - Posted by | business and costs, UK

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