Q&A: Investment in nuclear

April 2026  |  SPECIAL REPORT: INFRASTRUCTURE & PROJECT FINANCE

Financier Worldwide Magazine

April 2026 Issue

FW discusses nuclear investment with Matthew Honeyben at CMS, Ben Shorten at Gibson Dunn, and Amy Roma at Orrick, Herrington & Sutcliffe LLP.

FW: What are the most significant global trends currently shaping investment in nuclear energy? How would you summarise the core strategic case for investing in this sector?

Shorten: Investment in nuclear energy is being shaped by three forces: decarbonisation targets, heightened energy security priorities, and fast-rising demand from electrification and digital infrastructure. The strategic case is that nuclear delivers reliable, low-carbon power at scale, complementing renewables and reducing exposure to volatile fossil fuel markets. The rising power demand implied by the need for data centres can only really be met, in a decarbonised manner, by either wind, solar, battery or nuclear. For investors, the asset class offers long duration, inflation resilient cash flows – but crucially, only where supportive policy frameworks exist to mitigate market or power price risk and some existential issues. Government revenue stabilisation models such as contracts for difference (CfD), capacity markets or regulated asset base (RAB) models, plus growing corporate demand for firm, clean electricity, including from data centres, strengthens bankability and attracts investors as the UK government’s Sizewell C process demonstrated.

Honeyben: Several converging global trends are driving renewed investment in nuclear energy. Russia’s invasion of Ukraine triggered record-high energy prices in Europe, exposing the vulnerability of nations dependent on fossil fuel imports. The current tensions in the Middle East only reinforce this focus on energy security. At the same time, nuclear has gained recognition as being essential to achieving net zero. Adding to this, the artificial intelligence (AI)-driven surge in data centre demand – projected to more than double by 2030 – is creating further pressure for firm, carbon-free power. The unique characteristics of nuclear power, namely that it is a source of energy generation that provides clean, dispatchable, baseload, non-intermittent power, mean that accelerated deployment can alleviate energy security concerns and help satisfy the exponential rise in global electricity demand.

Roma: Global forces are reshaping nuclear investment. Electricity demand is accelerating due to data centres, electrification and industrial reshoring, requiring reliable 24/7 firm capacity. Energy security has re-emerged as a core government priority. And deep decarbonisation goals require low-carbon resources that can operate at scale and with high-capacity factors. The strategic case is straightforward: nuclear provides long duration, dispatchable, zero-carbon power with predictable operating costs and multi-decade asset lives. As renewable penetration increases, the value of firm, clean capacity rises. In markets adopting modern risk allocation frameworks – including contracted offtake and supportive public policy – nuclear becomes a cornerstone asset class that anchors grid reliability, supports industrial growth and underwrites long term economic stability.

“Emerging technologies are reshaping nuclear investment, primarily through risk reduction, scalability and new delivery models.”
— Amy Roma

FW: How are nuclear projects typically financed? In what ways can a mix of public and private capital improve the bankability and delivery of these investments?

Honeyben: Financing models vary, but government support in some form or other remains a fundamental theme in most cases. A government support package typically involves a combination of direct government investment, guarantees for the repayment of third-party debt, indemnities for specific low probability, high impact events, and revenue support schemes. There are various revenue support mechanisms. The RAB model allows cost recovery through regulated consumer charges during construction, deployed on the Sizewell C project in the UK. CfDs are long-term contracts with pre-agreed strike prices providing revenue certainty, deployed on the Hinkley Point C project in the UK, and on many of the currently planned newbuild projects in Europe. And there are long term power purchase agreements, as deployed on the Barakah One Project in Abu Dhabi. The inclusion of private capital brings significant advantages, including heightened due diligence to rigorously scrutinise the construction risk profile, adequacy of the funding envelope and project delivery arrangements. This independent scrutiny provides additional project assurance that may not always be in place in purely government-funded projects, which in turn promotes both bankability and more streamlined delivery. Although private investment comes at a higher cost of capital, it does allow governments to take these nationally significant projects off balance sheet. The challenge is developing an appropriate, project specific support package to attract private capital on commercially acceptable terms.

Roma: Large-scale nuclear projects and mid-size small modular reactors (SMRs) are capital intensive and typically financed through sponsor equity combined with long-tenor debt anchored by revenue certainty. Government support is also common, especially for ‘first of a kind’ projects. Regulated utility models rely on rate-base recovery, while other projects rely on long-term power purchase agreements or similar frameworks that provide stable electricity prices and predictable income. Given the scale and construction complexity, public credit enhancement, including loan guarantees, sovereign support, export credit and policy-backed revenue mechanisms, often play a decisive role. Blended capital improves bankability by lowering weighted average cost of capital, de-risking early stage development, and reallocating ‘first of a kind’ and political risk away from private lenders. Public participation can also signal policy durability, crowd in institutional capital and support supply chain investment. Private capital, in turn, enforces execution discipline, milestone accountability and commercial rigour. The combination strengthens delivery by aligning incentives across construction, financing and operations. Microreactors, by contrast, may rely more heavily on strategic equity, government procurement or balance sheet financing, reflecting their smaller scale and distributed deployment model.

Shorten: Nuclear projects are capital intensive with long construction periods, so finance typically blends public and private capital. Historically, projects were state backed, with the main participants being utilities or state-owned entities and nuclear technology providers or operators such as EDF, KEPCO, Westinghouse and so on. This has recently been broadened to include private sector financial investors, and doing so relies on tools that de-risk cash flows and compress the weighted average cost of capital. In the UK, for instance, RAB models allow revenue recovery during construction, reducing cash flow risk during the build phase, while CfDs stabilise operating period revenue. On the debt side, government loan guarantees compress debt margins and extend tenor. Export credit agency support and, in some markets, vendor financing have been increasingly important sources of capital as construction costs have increased. Private equity participation, such as in Sizewell, imposes additional procurement discipline. All of this is aimed at both increasing liquidity and lowering financing costs, with the latter being the dominant driver of nuclear’s levelised cost.

FW: How does the cost profile of nuclear energy compare with renewable and fossil fuel alternatives? How prominently do sustainability and environmental considerations feature in these assessments?

Shorten: Nuclear’s cost profile differs from both renewable and thermal projects. It is capital intensive, with relatively low, predictable fuel costs, whereas thermal plants present the opposite profile, with lower upfront costs but ongoing commodity exposure, often pricing plant out of the market. Simple, levelised cost of electricity (LCOE) comparisons can, and often do, understate system integration costs for renewables, such as grid reinforcement, balancing services and storage. When whole-system costs are considered, nuclear can be competitive, particularly in markets seeking firm, low-carbon capacity. Environmental performance vis-à-vis carbon is strong: lifecycle emissions are comparable to wind and far below fossil fuels. However, sustainability assessments increasingly weigh long term waste management, water use and decommissioning alongside carbon intensity – and that can be more challenging. There are always questions over nuclear decommissioning. For all projects, adequate governmental commitment, regulatory pathway clarity, and contractual frameworks that appropriately allocate risks between public and private parties remain vital.

Roma: Nuclear’s cost profile differs fundamentally from both fossil fuels and renewables, making like-for-like comparisons essential. It is capital intensive upfront, but benefits from low and stable fuel and operating costs over very long asset lives – often 60 to 80 years. Gas-fired generation may appear less expensive initially, yet it exposes investors to fuel price volatility, carbon policy risk and long term regulatory constraints. Renewables can offer attractive headline levelised cost of electricity figures, but system-level costs, including storage, transmission expansion and firming capacity, are often excluded from simplified comparisons. Sustainability considerations are now embedded in long term corporate planning and capital allocation. Companies recognise that generation assets built today must remain economically and politically viable for decades. Lifecycle emissions, air quality impacts, land use and taxonomy alignment directly influence financing terms, policy eligibility and reputational risk. As decarbonisation targets tighten, investors increasingly prioritise assets that offer durability, reliability and regulatory resilience over multi-decade horizons, not simply the lowest near-term cost.

Honeyben: Nuclear energy’s cost profile differs fundamentally from renewables. Despite having low operating and fuel costs, its capital-intensive nature means that up to 75 percent of lifetime costs are incurred before any electricity is generated. However, comparing nuclear against renewables on generation cost alone, via the LCOE, is an incomplete exercise, as LCOE analysis alone does not capture renewables system costs associated with intermittency and grid integration. Costs such as grid reinforcement, energy storage and backup capacity for intermittent sources substantially alter the value equation, particularly as systems with high shares of renewables require additional investment in grid inertia and flexibility management. Sustainability considerations also support the increased deployment of nuclear. Lifecycle emissions are comparable to wind and far below fossil fuels, while land use is minimal relative to renewables – a 1000MW nuclear plant occupies one square mile versus roughly 360 times more area for equivalent wind capacity.

“Nuclear’s cost profile differs from both renewable and thermal projects. It is capital intensive, with relatively low, predictable fuel costs, whereas thermal plants present the opposite profile.”
— Ben Shorten

FW: How are emerging technologies and innovation pathways influencing the nuclear investment landscape? What impact do they have on project economics and capital structures?

Roma: Emerging technologies are reshaping nuclear investment, primarily through risk reduction, scalability and new delivery models. Advanced reactors and SMRs are designed to improve constructability through modularisation, standardised designs and smaller unit sizing aligned with grid, industrial and distributed demand. Digital engineering, advanced manufacturing and supply chain modernisation aim to enhance quality control and schedule predictability. At the same time, we are seeing innovation in project delivery and financing structures. Portfolio-based development, fleet deployment strategies, industrial offtake agreements and structured availability-style payments are changing how revenue certainty is established. Data centre procurement and industrial heat applications are expanding the buyer universe beyond traditional utilities. Economically, innovation affects risk perception more than core generation costs. Investors prioritise replicability, licensing predictability and learning-curve effects. Capital structures increasingly reflect staged deployment – with higher sponsor equity and public support for early units, transitioning toward more conventional project finance as technologies move from ‘first of a kind’ to repeat builds.

Honeyben: The nuclear investment landscape is broadening due to the demand for clean, baseload power from a growing range of private players. In particular, there are an increasing number of investment opportunities for new market entrants considering colocation projects – placing energy-intensive facilities, primarily data centres, desalination plants, industrial hubs and even universities, directly adjacent to nuclear power plants to secure reliable, 24/7 carbon-free energy. These dynamics are already attracting major technology companies, and in September 2024, 14 financial institutions – including Goldman Sachs, Morgan Stanley, Barclays and BNP Paribas – publicly backed the promotion of nuclear energy in the low-carbon transition. Additionally, other financing bodies, such as the World Bank, are now open top supporting nuclear power projects, which further signals a shift in institutional appetite.

Shorten: Radically, SMRs promise factory fabrication, standardised designs and modular deployment, which can reduce construction schedule risk and enable phased capital calls. Advanced reactors target enhanced safety, efficiency and process heat for industrial applications, potentially opening multiple revenue streams from power, heat and hydrogen production. These innovations will change project economics: smaller unit sizes reduce single-asset exposure and support programmatic portfolio rollouts, while standardisation creates scope for replication and learning-curve cost reductions. Capital structures are evolving accordingly, with strategic investors, insurance companies, infrastructure and pension funds, and venture capital increasingly funding early stage designs alongside public support, with non-recourse project finance becoming feasible once reference plants are delivered and designs achieve replicability.

FW: What are the main risks and barriers facing nuclear energy investors? Which economic, regulatory or competitive factors are most important to understand?

Honeyben: The investment opportunity for investors is broadening year on year. Projects which were formerly government led and financed are now attracting private capital as governments are developing more flexible support packages to attract external investment. The influx of smaller, modular reactors with a broader supply chain is also providing additional scope for investment into the sector, although the scale of capital required is still a barrier to entry for many investors. Resource scarcity is also a limiting factor as supply chains are stretched, while competition for suitably qualified and experienced personnel is intensifying. Geopolitical tensions further serve to limit the markets within which technology vendors can do business, so as we stand it is very much a seller’s market. Regulatory and policy risks add further uncertainty, although there is rightly a growing trend in harmonisation across regulatory bodies internationally to expedite new nuclear development and lower the cost and risk profile of new projects.

Shorten: Nuclear investors face numerous risks. Construction risk, such as schedule slippage and cost overruns, remains paramount and can be amplified by supply chain bottlenecks and skilled labour shortages. Regulatory risk stems from licensing complexity and the treatment of new designs or, more often, the application of a design to a new regulator, so clarity on design standardisation, serialisation and regulator capacity is crucial for project timelines. Political risk arises from policy shifts across multi-year build and payback periods, while market risk reflects merchant price exposure and competition from subsidised renewables where revenue is not stabilised through long-term contracts. Back-end obligations for waste management and decommissioning require transparent provisioning and clear contractual allocation between public and private parties. Effective risk mitigation requires supportive policy and robust contracts – appropriate government support mechanisms for revenue visibility and sovereign guarantees for completion risk, engineering, procurement and construction wraps with meaningful contingencies, and incentive-aligned delivery structures, typically through the involvement of a large technology provider with a proven track record.

Roma: The dominant risk facing nuclear investors today is execution – particularly ‘first of a kind’ construction performance. Nuclear projects are capital intensive, and the cost of capital represents a substantial portion of total project cost. Delays and cost overruns increase financing expense materially, which can drive overall economics. This dynamic is not unique to nuclear; it applies to large-scale infrastructure generally. The key is disciplined project delivery and supply chain readiness during early deployments. In established nuclear markets such as the US, regulatory frameworks are largely in place, and regulators have spent years preparing for advanced reactor licensing. Similarly, demand risk has shifted – appetite for firm, carbon-free power is strong, particularly from utilities and large industrial and technology buyers. The central challenge is moving efficiently from ‘first of a kind’ to ‘nth of a kind’ builds. As standardisation and repetition take hold, risk profiles should improve, capital costs decline and competitiveness strengthen.

“The nuclear investment landscape is broadening due to the demand for clean, baseload power from a growing range of private players.”
— Matthew Honeyben

FW: To what extent are geopolitical dynamics driving increased global investment in nuclear energy? How might shifts in international relations prompt governments to reassess their energy strategies?

Roma: Geopolitics is now a central driver of nuclear investment because energy is not merely economic infrastructure – it is national security. The Russia-Ukraine war exposed the vulnerability of countries heavily reliant on Russian natural gas, triggering price shocks, supply disruptions and strategic reassessments across Europe and beyond. The resulting energy crises underscored how fuel dependence can translate into geopolitical leverage. In response, governments are prioritising energy sovereignty, supply chain resilience and diversified generation portfolios. Nuclear offers long term fuel stability, predictable operating costs and reduced exposure to volatile commodity markets. It also supports domestic industrial capacity and strategic alliances through structured cooperation agreements. As global tensions persist, nuclear build programmes are increasingly viewed as instruments of sovereignty, resilience and geopolitical stability, not solely climate policy tools.

Shorten: The energy security shock following Russia’s invasion of Ukraine prompted several countries to extend reactor lifetimes, reverse phase-out decisions or accelerate newbuild programmes. Concentration of enrichment and fuel fabrication capacity in a limited number of jurisdictions has spurred governments to diversify supply chains and rebuild domestic nuclear fuel cycle capabilities. Fuel supply chain issues can be acute for new advanced designs, especially those using high-assay low-enriched uranium. Internationally, state-backed vendors such as KEPCO, ROSATOM and CGN compete for strategic influence, often supported by concessionary export finance that shapes procurement outcomes in emerging markets. For investors, these dynamics create policy tailwinds for projects aligned with current national security objectives, but they also elevate the importance of vendor-country risk, sanctions exposure and localisation requirements as material factors in due diligence, as well as heightening political risk should national security views change.

Honeyben: Geopolitical dynamics are central to nuclear investment decisions. Russia’s invasion of Ukraine was a pivotal moment: record-high gas and electricity prices exposed the vulnerability of nations dependent on fossil fuel imports and the fragility of oil and gas supply chains reliant on specific pipelines, liquefied natural gas terminals and shipping routes. Many European countries have since sought to diversify their energy sources and are turning to nuclear as part of this dynamic, and the current conflict in the Middle East is likely to reinforce policy decisions to prioritise investment into nuclear energy. Investment in nuclear may also be a strategic tool to maintain or reinforce spheres of geopolitical influence. The intergovernmental agreement between Poland and the US illustrates this dynamic – the agreement in relation to civilian nuclear power formed part of a wider strategic discussion centred upon military defence supplies and troop deployments to mitigate the effects of Russia’s invasion of Ukraine. By committing to US reactor technology, Poland reinforced its partnership and interdependence with the US as a counterweight to possible Russian encroachment.

FW: Looking ahead, which nuclear investment opportunities are likely to grow in prominence? How central is nuclear energy becoming in meeting rapidly rising electricity demand?

Shorten: Investment opportunity is expanding for two main reasons. First, structural demand growth from data centres, transport electrification and industrial decarbonisation is increasing the requirement for firm, dispatchable, low-carbon capacity. Also, nuclear is increasingly key to balancing system needs and meeting surging electricity demand without compromising security of supply or emissions targets. This leads to three major opportunities. First, life extension and power uprate programmes for existing reactors offer lower risk, ‘quicker to cash’ investments anchored by proven operating assets with established performance records. Second, ‘traditional’ newbuild grid-linked plant projects internationally. Third and probably most exciting, SMRs with potential applications in both electricity generation and industrial heat, both grid-linked and ‘behind the meter’.

Honeyben: Data centre and AI-driven electricity demand represents the most prominent near and mid term investment opportunity. Global data centre electricity consumption is projected to increase dramatically, with nuclear power expected to supply a considerable portion of this new demand. This is already materialising in the US, with various major energy contracts being entered into, and this trend is expected to expand to the UK and Europe, where SMR-powered data centres are in the pipeline in multiple jurisdictions. Beyond electricity, nuclear-powered desalination is gaining traction in water-scarce regions, with projects proposed in Saudi Arabia, South Africa and the US. Nuclear reactors can support desalination through two methods – distillation or reverse osmosis – and this technology has already been demonstrated in India, Japan, Kazakhstan and Pakistan.

Roma: Near-term growth is likely in life extensions and uprates of existing reactors, which provide cost effective, firm, clean capacity. Beyond that, large-scale new builds in supportive markets and repeat SMR deployments anchored by creditworthy off takers are poised to expand. Investment across the fuel cycle – enrichment, conversion, fabrication and transport – is also gaining prominence as supply chain security becomes strategic. As AI-driven load growth, electrification and industrial decarbonisation accelerate, electricity demand is rising faster than many grids anticipated. Intermittent resources alone often require substantial firming and transmission expansion. Nuclear is becoming increasingly central as a source of dispatchable, zero-carbon baseload power capable of supporting both reliability and decarbonisation objectives. Where revenue frameworks and execution models are credible, nuclear is moving from complementary resource to foundational infrastructure.

 

Matthew Honeyben is a partner in the energy & climate change team at CMS in London, specialising in nuclear energy. He has over 15 years’ experience representing developers, corporates, sponsors, state-owned entities, lenders, infrastructure funds and export credit agencies on all aspects of nuclear energy projects, both conventional large scale and small modular reactor projects. He can be contacted on +44 (0)20 7067 3336 or by email: matthew.honeyben@cms-cmno.com.

Ben Shorten’s practice is focused on the development and financing of complex, large-scale energy and infrastructure projects, with a particular focus on energy transition, conventional power and water, and oil & gas projects. He regularly advises both sponsors and lenders on innovative, ‘first in kind’ projects and has worked with the leading clients in the energy sector in Europe, the Middle East and Asia. He can be contacted on +44 (0)20 7071 4231 or by email: bshorten@gibsondunn.com.

Amy Roma is a partner at Orrick, Herrington & Sutcliffe and a globally recognised authority on nuclear energy and fusion. She advises reactor developers, investors, utilities, off takers and government stakeholders on commercial strategies required to bring next-generation power technologies to market. She is widely recognised for helping deliver ‘first of a kind’ nuclear and fusion projects from concept to deployment by aligning regulatory strategy, project financing and commercial execution. She can be contacted on +1 (202) 339 8414 or by email: aroma@orrick.com.

© Financier Worldwide

THE PANELLISTS

 

Matthew Honeyben

CMS

 

Ben Shorten

Gibson Dunn

 

Amy Roma

Orrick, Herrington & Sutcliffe LLP

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