Private equity behemoth Apollo Global Management has lined up a £4.5 billion ($6 billion) loan to finance the Hinkley Point C nuclear project in the United Kingdom. This support is intended to fill the significant financial gap that the project has experienced for many years. This funding is remarkable as the largest single private capital contribution to date to a UK project of national significance. At the same time, Hinkley Point C is very much the first nuclear power station built in Britain in decades.
Hinkley Point C, led by EDF, has encountered several years of delays and cost increases before it began. Despite the touted benefits, the challenging construction period has led to lingering doubts over the project’s continued viability and financial sustainability. Reports indicate that Apollo has been chasing this deal opportunity for the past several weeks. The firm is currently deep in negotiations with EDF over the proposed loan.
Per the Financial Times, which was the first to report the news of the impending transaction. Now, two other sources have verified this news to CNBC, but they asked to remain anonymous due to the highly sensitive negotiations taking place. Apollo’s loan will get directly to the heart of the financial hole that’s threatening the viability of Hinkley Point C. This support is the lifeblood of the project’s continued advancement.
The importance of Apollo’s investment should not be ignored. The UK is in urgent need of new, dependable forms of energy. As the country shifts towards a low-carbon future, Hinkley Point C will be a vital component in helping to address the country’s energy needs. The project is expected to produce enough renewable electricity to power about six million homes and cut carbon emissions in half.
Despite its touted benefits, Hinkley Point C has faced a series of challenges including escalating costs and construction setbacks. These shortcomings have driven increased attention from regulators and other stakeholders. Apollo is pumping a significant amount of new capital into the project with a plan to stabilize the project and ensure it gets built. They haven’t made the terms of the loan public.