Rachel Reeves’ wealth fund pumps £600m into Rolls-Royce SMR
Rachel Reeves’ flagship wealth fund has announced a fresh heap of financing for Rolls-Royce SMR following its tie-up with Ed Miliband’s state-owned energy company.
The National Wealth Fund has revealed a £599m financing package for Rolls-Royce Small Modular Reactors (SMR) in a bid to kick start delivery on its project with Great British Energy.
The partnership will see the creation of the UK’s first small modular reactors as part of the government’s drive for clean energy.
Small modular reactors are designed to produce up to about one-third the electricity of conventional reactors. Developers argue that small reactors can be constructed more quickly and cost-effectively than larger power reactors, with scalability to meet specific local demands.
Each Rolls-Royce SMR is expected to generate 470 megawatts of low-carbon electricity.
The capital injection from the taxpayer-backed wealth fund is designed to de-risk the project for private lenders, through effectively using public money to “crowd in” billions in additional investment from the City and international markets.
Rolls-Royce SMR set for jobs boon
Around a thousands jobs are tipped to be created at Rolls-Royce SMR, which is co-owned by the FTSE 100 giant and Czech power company CEZ, through the funding.
Rolls-Royce SMR was picked as the preferred technology partner for the project last June, with around £2.6bn earmarked in the 2025 Spending Review for the contract.
The Chancellor said: “This investment, along with vital financing from the National Wealth Fund, will strengthen our energy security, create skilled jobs and help to build a new generation of homegrown nuclear technology that will power our economy for decades to come.”
Meanwhile, Ed Miliband said the government’s clean energy mission was “the only route to getting off the rollercoaster of fossil fuels and take back control of our energy independence”.
The energy secretary has been placed in the hot seat over the last few weeks as oil and gas markets were rocked by the crisis in the Middle East.
The surge in energy prices has led to calls for the government to drill the North Sea. But during a Prime Minister’s Questions session at the end of March, Sir Keir Starmer said he doesn’t hold legal powers to approve fresh exploration of the fields, with the decision falling in the hands of Miliband.