The government becomes an equal partner of 脡lectricit茅 de France (EDF) in the project, enabling the exit of Chinese state-owned China General Nuclear (CGN).
EDF will also provide additional investment to match the government鈥檚 stake in the project. The government will work with the project company to seek to attract new third-party investment to help finance the project鈥檚 estimated 拢20bn construction cost.
Sizewell C has been designated as the UK鈥檚 first project to use the newly established regulated asset base (RAB) funding model for nuclear 鈥� the same model for the Thames Tideway Tunnel and London Heathrow Terminal 5.
This lower cost financing method is expected to lead to savings of at least 拢30bn over the lifetime of the Suffolk power station compared to the existing contracts for difference scheme that has been used for funding Hinkley Point C, currently under construction by a joint venture of Bouygues and Laing O鈥橰ourke (Bylor) in Somerset.
The government also plans to set up Great British Nuclear, an arms鈥� length body (ALB) that will develop a pipeline of nuclear power plants, beyond Sizewell C.
The investment also allows for China General Nuclear鈥檚 (CGN) exit from the project, including buy-out costs, any tax due and commercial arrangements.
Chancellor of the exchequer Jeremy Hunt said: 鈥淭oday鈥檚 investment in Sizewell C represents the biggest step on our journey to energy independence - the first state backing for a nuclear project in over 30 years. Once complete, this mega project will power millions of homes with clean, affordable, home-grown energy for decades to come.
鈥淭ogether with our drive to improve the nation鈥檚 energy efficiency, this package will help to permanently bring down energy bills and stop Britain being at the mercy of global gas prices beyond our control.鈥�
EDF Energy chief executive Simone Rossi said: 鈥淭his is a big vote of confidence in Sizewell C and we are very excited the government is partnering with us to prepare the project for further investment.聽Sizewell C will build on the achievements of Hinkley Point C and replicating its design will provide more certainty over schedule and costs. It will deliver another big boost to jobs and skills in the nuclear industry and provide huge new opportunities for communities in Suffolk. New nuclear will protect Britain from volatile global gas markets and help keep bills under control for the country鈥檚 homes and businesses.
鈥淕reater energy efficiency will strengthen Britain鈥檚 energy independence and reduce household bills permanently, and we welcome government鈥檚 action. We are ready to step up our installation rates to help more households benefit from lower bills.鈥�
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