Project financing in nuclear new build, why not? The legal and regulatory barriers

This paper investigates the legal barriers to apply project finance for building nuclear power plants. Countries such as the UK, Turkey and emerging economies (i.e. Malaysia and Indonesia) are increasingly seeking to attract private investors for nuclear projects using project finance. This is an innovative approach, and until now the only cases registered are Hinckley Point C in the UK and Akkuyu in Turkey. This paper scrutinises the mismatches between the requirements of project finance and nuclear law. Nuclear law introduces specific requirements affecting the security interest of private lenders, hindering the bankability of nuclear projects on a non-recourse basis. The paper emphasises that the performance-based regulatory approach is more compatible with project finance compared to the prescriptive based one. Furthermore, the paper examines the gaps between nuclear and holistic energy law, looking at the financing of energy infrastructures. Improving nuclear law enables to apply project finance to nuclear power plants, facilitating their deployment. Consequently, nuclear law plays a central role in promoting sustainable energy mixes characterised by reduced carbon emissions.