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TRANSACTION OF THE QUARTER - The Sizewell C Nuclear Power Station

Updated: Nov 27, 2025


The Sizewell C nuclear power project has emerged as one of the UK’s most significant energy transactions, not only for its £38 billion scale, but also for pioneering the application of the Regulated Asset Base (RAB) financing model to nuclear infrastructure in the UK. This ground-breaking deal, supported by a multi-jurisdictional legal ecosystem from the likes of Slaughter and May, Linklaters and Addleshaw Goddard, represents a fundamental shift in how the UK approaches large-scale energy projects. Yet, it also raises critical questions about risk allocation, future costs and long-term sustainability.


Marking the next phase of Britain’s nuclear energy ambitions, the project builds on nearly two decades of development since EDF’s acquisition of British Energy in 2008. With nuclear power currently generating around 14% of the UK's electricity, the government aims to reduce emissions by 81% compared to 1990 levels by 2035. The project’s design will mirror that of Hinkley Point C in Somerset – a choice taken to replicate supply chains whilst avoiding the cost issues and technical risks that its predecessor faced. Once complete, the Suffolk site is projected to supply low-carbon power to six million homes and create 10,000 jobs during construction. 


The application of the RAB model is the transaction's most significant facet. To finance a highly capital-intensive, long-lead project, legal teams needed to adapt a model traditionally used for mature utilities. Unlike traditional project financing where investors await operational revenues (this was the case for Hinkley Point C, which used a Contract for Difference model), the RAB structure allows institutional investors to receive a regulated return during the construction phase through consumer levies, and from electricity sales once the project is operational. British households will contribute approximately £1 monthly through their energy bills, effectively funding construction, and bearing some construction costs and risks alongside institutional investors (though without equity ownership or returns). The diverse financial ownership structure consists of the UK government, holding the largest stake at 44.9%, with EDF, Centrica, and overseas investors such as La Caisse providing equity alongside. On the debt side, the National Wealth Fund provides the majority of financing, with additional support from French export credit guarantees for commercial bank loans. Proponents argue that this combination reduces the overall cost of capital (by avoiding interest accrued over time) and could become a template for future infrastructure financing.


However, significant concerns persist. Some analysts forecast actual costs reaching £100 billion – substantially exceeding government predictions. Environmental groups have also launched legal challenges over additional sea defences and their potential impact on local habitats. Moreover, questions remain over whether consumers should bear construction risks for assets that may face future competition from cheaper renewables. There seems to be an asymmetry in risk-reward between consumers, who absorb construction risk through bills, and investors, who receive regulated returns and ownership stakes. 


Therefore, while the RAB model offers a potentially transformative approach to funding large-scale projects, the true test for the efficacy of this next stage in UK nuclear energy lies in its execution and cost control. 


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