The energy industry is pressing the Government to include nuclear technology in its Green Financing Framework so power plants and mini-nuclear reactors can benefit from the funding raised through government bonds and retail savings programmes.
Nuclear lobbyists are hoping the Government might reverse its decision to exclude nuclear technology from the framework in June 2021.
It is thought green bonds could be used to fund a public stake in a nuclear power station such as Sizewell C as politicians seek to remove Chinese investments from the sector.
Industry sources said they will push for a change in policy if nuclear is also admitted into the “green taxonomy” for classifying environmentally friendly investments. The Government is seeking to raise around £15bn a year by issuing green gilts and green savings bonds through the public savings scheme National Savings & Investments.
Institutional investors have queued up to plough money into the green gilt programme but the NS&I bonds have been hampered by uncompetitive rates.
Barclays held a conference in March to drum up interest in Britain’s nuclear programme. The bank’s Nuclear Energy Solutions conference was aimed at discussing how private investors can help finance nuclear projects and invest in nuclear supply chains.
A number of City investors have indicated they could allocate funding to nuclear investments if the Government changes its green taxonomy when it publishes an updated classification in the coming months. But one pension fund source said the classification was not a “silver bullet” and that significant hurdles would still remain for investors.
Tom Greatrex, chief executive of the Nuclear Industry Association, said: “The next prime minister should follow through on the commitments that have been given and give nuclear the green label it deserves. That will make it cheaper and easier to finance nuclear projects from a wider pool of capital, and that’s what we need for our energy security and net zero future.”
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