Two top UK pension funds snub Sizewell C nuclear plant plan

Attempts to attract investment in UK infrastructure were halted after two of the UK’s largest pension funds turned their backs on Sizewell C.

Ministers are tearing up the old EU bureaucratic red tape which Chancellor Jeremy Hunt says will free up £100bn of potential funding for major projects.

Chief among these is the £20bn Sizewell C nuclear power station in Suffolk, which is being developed by the government and EDF but will require billions in private funding.

But two of the UK’s largest pension funds – the BT Pension Scheme and NatWest – have told campaign group Stop Sizewell C and the Daily Mail that they have no intention of backing the project.

For years, the government has tried to win over pension groups and institutional investors by introducing a new financing model that allows them to receive dividends during the construction process.

It is expected to go a step further by classifying nuclear energy as a green energy source in an upcoming eco-friendly financing strategy, which would make it easier for companies to get support to invest in power plants.

But an industry source said Sizewell C would still not be a suitable investment for ‘typical big-name UK pension schemes’, as they believe the risk of cost overruns and delays is too great.

So far, other potential donors, such as Nest and Legal & General, have said they have no intention of funding the project.

But UK gas owner Centrica would consider taking a stake, while FTSE 100 savings and retirement firm Phoenix Group has said it is happy to support nuclear.

The source added that funding would more likely come from North America and the Middle East, with Emirati-based sovereign wealth fund Mubadala already in the mix.