UK approves Sizewell C nuclear plant after La Caisse investment

By Sarah Young and Nina Chestney

LONDON (Reuters) -Britain gave the final go-ahead for the 38 billion pound ($51 billion) Sizewell C nuclear plant in eastern England on Tuesday after it secured investment from British and international investors including Canadian pension fund La Caisse.

Under the deal, the British state will be the largest shareholder in the project with a 44.9% stake, La Caisse will hold 20%, UK energy firm Centrica 15% and London-based Amber Infrastructure will take an initial 7.6%, joining France's state-owned EDF which had already announced its 12.5% stake.

The decision to go ahead with Sizewell C is another sign of a nuclear revival in Europe as several countries look to build new plants to replace ageing fleets, boost energy security and reach climate goals.

The plant in Suffolk will be only the second new nuclear plant built in Britain in more than two decades. It is expected to create around 10,000 jobs during the peak of construction, and produce enough electricity to power around 6 million homes when built.

EDF expects Sizewell C to be operational by around the mid to late 2030s.

"Delivering next generation, publicly-owned clean power is vital to our energy security and growth," UK finance minister Rachel Reeves said in a statement.

State loans are part of the financing mechanisms for most nuclear power plants in Europe, giving governments ownership stakes, while power price guarantees help companies to fund construction.

The last nuclear power plant built in Britain, French state-owned EDF's Hinkley Point C, has been beset by delays and cost overruns, and is not due to start operating until about 2030.

EDF had initially said it would be powering British homes in 2017.

Sizewell C was first proposed in the early 2010s, when the plan was for it to be developed by EDF with China General Nuclear Power Group, but the UK government bought out the Chinese firm's stake in 2022 amid security concerns.

The announcement of La Caisse as the second biggest shareholder comes as a surprise after months of speculation that Canadian investor Brookfield was in pole position to invest.

The 38 billion pound total cost estimated by the government compared with initial estimates of a price tag of around 20 billion pounds.

France's EDF has said it is investing around 1.1 billion pounds in Sizewell, while Centrica said in its statement it had committed to construction funding of 1.3 billion pounds.

The government statement said Britain's National Wealth Fund would provide the majority of the debt finance for the project, alongside a debt guarantee from France’s export credit agency, Bpifrance Assurance Export.

($1 = 0.7424 pounds)

(Reporting by Sarah Young, Susanna Twidale and Nina Chestney; Editing by Kate Holton and Susan Fenton)