The funding commitment from Business and Energy Secretary Kwasi Kwarteng will be used to continue the development of the project which will aim to attract further financing from private investors and, subject to value for money and relevant approvals, the UK government.
Ministers have made a commitment to reaching a Final Investment Decision on at least one large-scale nuclear power station this parliament. This would provide continuous, low carbon electricity at scale, strengthen Britain’s energy security and reduce our exposure to volatile global gas prices, provided there is clear value for money for consumers and taxpayers.
Negotiations between the government and Sizewell C project developer, EDF, have been ongoing since last year. If built, Sizewell C would power the equivalent of around 6 million homes, as well as supporting up to 10,000 jobs in Suffolk and across the UK.
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Mr Kwarteng, said: "In light of high global gas prices, we need to ensure Britain’s future energy supply is bolstered by reliable, affordable, low carbon power that is generated in this country.
"New nuclear is not only an important part of our plans to ensure greater energy independence, but to create high-quality jobs and drive economic growth.
"The funding announced today will further support the development of Sizewell C during this important phase of negotiations as we seek to maximise investor confidence in this nationally significant project."
The £100 million option fee will be invested by EDF into the project to help bring it to maturity, attract investors, and advance to the next phase in negotiations. In return, the government will take certain rights over the land of the Sizewell C site and EDF’s shares in the Sizewell C company, providing opportunities to continue to develop nuclear or alternative low carbon energy infrastructure on the site should the project not ultimately be successful.
If Sizewell C reaches a Final Investment Decision, the government will be reimbursed the £100 million option fee with a financing return, either in the form of either cash or an equity stake in the project.
If the project does not reach this important milestone, then the government would ask for either the Sizewell C Company shares or the Sizewell C site or, if EDF is unable to provide these assets as requested by government, the money will be refunded by EDF together with a financing return.
No decisions, including on the final configuration of Sizewell C's investors, have been made.
