Can SMRs unlock financing?
Whilst a project of the size and complexity of Hinkley Point C faces a range of challenges which lessen the availability of limited-recourse financing, it is clear that nuclear plant construction violates the basic precepts of project finance due to the unpredictability of project costs and schedule, write Rory Connor and Ken Culotta of law firm King & Spalding.
As the UK government mulls over the project fundamentals for Hinkley Point C one last time it is worth reflecting that, if and when the project finally goes ahead, EDF and its Chinese partners will proceed on the basis of on-balance sheet corporate funding; not limited-recourse project financing, as originally touted.
For the industry to flourish, even in the presence of strong government policy support, the ability to finance is critical. There is the possibility though that new technology and new construction techniques, in the form of small modular reactors (SMRs), may hold the key to overcoming such issues.