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Pension funds shun Sizewell C in major blow to Britain’s nuclear ambitions

Asset managers ‘extremely sceptical’ about nuclear push despite project’s ‘sustainable’ status

By Matt Oliver and Szu Ping Chan, 22 April 2023 •

The Government’s push to find investors for the £20bn Sizewell C nuclear
power station has suffered a significant blow as Britain’s biggest fund
managers have snubbed the scheme.

Jeremy Hunt, the Chancellor, sought to
make the project more attractive to green-focused asset managers in his
Spring Budget by proposing to give it “sustainable” status under UK
financing rules. Ministers have also reformed the funding model for nuclear
plants to hand investors more up-front rewards.

But senior sources in the
asset management industry and two of the country’s biggest fund managers
have dismissed the changes as irrelevant and insisted it would not persuade
them to back Sizewell C.

Nuclear power is seen as vital to Britain’s energy
security in the wake of the Ukraine war, with ministers calling for it togenerate 25pc of the country’s electricity needs by 2050. But despite
introducing new funding models and classifying it as “green” to attract
investors, the Government has struggled to persuade sceptical pension funds
and asset managers to get behind Sizewell C.

Legal & General – Britain’s
biggest money manager with £1.3 trillion of assets – said Mr Hunt’s
announcement will have no bearing on its opposition to large nuclear energy
schemes, as it is focused on supporting alternatives such as wind and
solar. A spokesman for Legal & General Capital told The Telegraph: “Our
stance hasn’t changed: we are focused on investing in and supporting other
innovative, viable, and cost-effective clean energy solutions that are
already delivering results.” Barclays has been brought in to run the financing process but this has not yet begun, prompting concerns it could
be held up by a potential general election next year.

Telegraph 22nd April 2023


April 24, 2023 - Posted by | business and costs, UK

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