La Caisse Invests US$2.3B in UK Nuclear Plant Sizewell C

Sarah Young and Nina Chestney of Reuters report UK approves Sizewell C nuclear plant after La Caisse investment:

Britain has secured investment for the Sizewell C nuclear plant from Canadian pension fund La Caisse, Centrica and Amber Infrastructure, enabling the government to give the final go-ahead on Tuesday for the 38 billion pound ($51 billion) project.

Under the deal, the British state will be the largest shareholder in the project with a 44.9% stake, La Caisse will hold 20%, UK energy firm Centrica 15% and London-based Amber Infrastructure will take an initial 7.6%, joining France's state-owned EDF which had already announced its 12.5% stake.

The decision to go ahead with Sizewell C in eastern England is another sign of a nuclear revival in Europe as several countries look to build new plants to replace ageing fleets, boost energy security and reach climate goals.

The plant in Suffolk will be only the second new nuclear plant built in Britain in more than two decades. It is expected to create around 10,000 jobs during the peak of construction, and produce enough electricity to power around 6 million homes when built.

EDF expects Sizewell C to be operational by around the mid to late 2030s.

"Delivering next generation, publicly-owned clean power is vital to our energy security and growth," UK finance minister Rachel Reeves said in a statement.

Sizewell will use a funding regulated-asset-base (RAB) model where companies building new plants would be paid during the construction phase, cutting down their development risk and allowing them to secure cheaper financing.

The announcement of La Caisse as the second biggest shareholder comes as a surprise after months of speculation that Canadian investor Brookfield was in pole position to invest.

The government said Sizewell C will add around one pound a month to consumer bills over the duration of the construction. It also said the plant could reduce the cost of a low-carbon electricity system by around 2 billion pounds per year on average when operational.

Critics of the RAB model, which has also been used to fund London's Thames Tideway Tunnel project, say it could leave taxpayers liable for any cost over-runs and delays during construction and add costs to energy bills at a time when many people are already struggling.

French state-owned EDF's Hinkley Point C nuclear plant, currently under construction in Somerset, has been beset by delays and cost overruns, and is not due to start operating until about 2030.

EDF had initially said it would be powering British homes in 2017.

Sizewell C was first proposed in the early 2010s, when the plan was for it to be developed by EDF with China General Nuclear Power Group, but the UK government bought out the Chinese firm's stake in 2022 amid security concerns.

The 38 billion pound total cost estimated by the government compared with initial estimates of a price tag of around 20 billion pounds.

France's EDF has said it is investing around 1.1 billion pounds in Sizewell, while Centrica said in its statement it had committed to construction funding of 1.3 billion pounds.

The government statement said Britain's National Wealth Fund would provide the majority of the debt finance for the project, alongside a debt guarantee from France’s export credit agency, Bpifrance Assurance Export.

Matt Toldeo of Chief Investment Officer also reports La Caisse invests $2.3B in UK nuclear plant:

A major nuclear energy project in the U.K. has received the green light from the British government to go forward after a final investment was made. Sizewell C, a nuclear power plant with 3.2-gigawatt capacity, will receive investment from the U.K. government, alongside multiple energy companies and institutional investors.
One institutional investor, Quebec pension fund La Caisse (formerly CDPQ, for Caisse de dépôt et placement du Québec), announced Tuesday that it will take a 20% stake in the project, investing up to 1.7 billion pounds ($2.3 billion).
Other investors include the U.K. government, with a 44.9% stake; British energy company Centrica, with a 15% stake; French energy company EDF Energy, with a 12.5% stake; and investment manager Amber Infrastructure, with a 7.6% stake.
The project, estimated to cost 38 billion pounds ($51.40 billion), has been in development since 2010, with initial construction beginning in January 2024.
The construction process is expected to peak at 10,000 jobs, and Sizewell C is expected to power more than 6 million homes across the U.K. when it comes on line.
“Our investment demonstrates our confidence in the UK market—our largest destination outside North America—and aligns with our commitment to the energy transition and decarbonization, enabled by our long-term capital and active ownership,” said Emmanuel Jaclot, La Caisse’s head of infrastructure, in a statement.
The investment in Sizewell C comes as the U.K. government is increasingly pushing for more domestic investment in infrastructure and other private assets.
As part of the Mansion House Accord, several U.K. defined contribution plans have pledged to invest at least 10% of their portfolios to alternative investments by 2030, with at least half of these investments to be made in the U.K.
The upcoming Pension Schemes Bill could give the government the power to mandate minimum target allocations to private assets for these pension funds.
In October 2024, the U.K. Infrastructure Bank was transformed into the National Wealth Fund, a sovereign wealth fund that will invest in domestic energy projects and other strategic industries,
“We’re delighted to welcome La Caisse’s investment in Sizewell C,”” said Julia Pyke and Nigel Cain, managing directors of Sizewell C, in a joint statement. “Their decision to take a 20% stake in the project reflects growing international backing for UK nuclear and confidence in Sizewell C. As one of the world’s leading institutional investors, La Caisse brings significant experience in sustainable infrastructure and in delivering projects that drive economic growth and long-term value creation.”
La Caisse currently manages 20 billion pounds of infrastructure assets in the U.K., with plans to invest another 8 billion pounds over the next five years. The fund is also an investor in London Heathrow Airport, Eurostar and the London Array offshore windfarm.
La Caisse manages C$473 billion in assets in total ($347.29 billion), as of December 31, 2024, and provides retirement benefits for more than 6 million beneficiaries. The fund has a C$105.9 billion real assets portfolio—of which C$64 billion is allocated to infrastructure.

Earlier today, La Caisse (formerly CDPQ) issued a press release stating it has committed to invest in Sizewell C, a critical asset for economic growth and energy security in the UK:

Quebec based global investment group, La Caisse (formerly CDPQ), today announces its commitment to invest up to £1.7 billion (CAD 3.2 billion) in Sizewell C, a 3.2GW nuclear power station located in the East of England. The investment, which represents a 20% stake in the project, will leverage La Caisse’s proven track record in delivering large scale infrastructure projects globally and support the UK’s transition to clean power and progress to net zero. Once complete, Sizewell C will provide over 60 years of clean, reliable power to the UK grid, helping to boost the UK’s economy, strengthen energy security and help reduce reliance on hydrocarbon sources, avoiding 9 million tonnes of carbon emissions annually.
The investment will be made alongside the UK Government, experienced operator EDF, British multinational energy and services company Centrica and investment partner Amber Infrastructure. The project is structured under the UK Government’s Regulated Asset Base (RAB) model which helps fund large-scale projects by offering predictability to investors while ensuring value for consumers over the long term.
“Our commitment to invest in Sizewell C reflects La Caisse’s constructive capital approach, working to deliver optimal financial performance for our clients alongside broader economic and societal progress. La Caisse has a strong track record of bringing private sector expertise alongside governments and industrial players to invest in complex, regulated infrastructure where value-for-money for consumers is key. Sizewell C is a positive development for UK consumers, as it is expected to provide long-term reliable baseload power and low carbon energy to more than 6 million homes across the UK, while contributing to the creation of 10,000 new jobs at peak construction and thousands more in the nationwide supply chain. We’re proud to support the UK Government in delivering this landmark project, advancing the country’s energy security and economic growth ambitions. Our investment demonstrates our confidence in the UK market – our largest destination outside North America – and aligns with our commitment to the energy transition and decarbonization, enabled by our long-term capital and active ownership,” said Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at La Caisse.
“It is time to do big things and build big projects in this country again – and today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come. This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good,” said Secretary of State for Energy Security and Net Zero, Ed Miliband.
“We’re delighted to welcome La Caisse’s investment in Sizewell C. Their decision to take a 20% stake in the project reflects growing international backing for UK nuclear and confidence in Sizewell C. As one of the world’s leading institutional investors, La Caisse brings significant experience in sustainable infrastructure and in delivering projects that drive economic growth and long-term value creation. Their involvement reinforces our strong financial base and supports our mission to create tens of thousands of high-quality jobs and 1500 apprenticeships across the country. Sizewell C will boost energy security, cut carbon, and drive regional and national growth for decades to come, and we’re proud to have La Caisse on board as part of that journey," said Julia Pyke and Nigel Cann, Joint Managing Directors of Sizewell C.
La Caisse is the world’s second largest institutional infrastructure investor, currently manages over £20 billion in UK investments and has significant experience in delivering projects that drive economic growth and positive change. La Caisse intends to invest around £8 billion in the UK over the next five years, increasing its asset allocation to the British market by nearly 50 percent. La Caisse has acted as a partner of trust and choice to the UK Government and its business partners for many years and has brought benefits to millions of UK consumers through investments in Eurostar, Heathrow Airport, First Hydro Company and London Array, an offshore wind farm generating 630MW of electricity, enough to power 500,000 UK homes.
La Caisse is also deeply committed to sustainable investing and investments supporting climate action. The firm has recently committed to have nearly £220 billion (CAD 400 billion) invested globally by the end of the decade in companies committed to decarbonising their operations as well as in climate solutions. These investments align with La Caisse’s commitment to its clients: delivering long-term value while managing risk responsibly.

ABOUT LA CAISSE

At La Caisse, formerly CDPQ, we have invested for 60 years with a dual mandate: generate optimal long-term returns for our 48 depositors, who represent over 6 million Quebecers, and contribute to Québec’s economic development.
As a global investment group, we are active in the major financial markets, private equity, infrastructure, real estate and private debt. As at December 31, 2024, La Caisse’s net assets totalled CAD 473 billion. For more information, visit lacaisse.com or consult our LinkedIn or Instagram pages.

When La Caisse CEO Charles Emond recently stated they were going to invest over US$10 billion in the UK over the next five years, he wasn't kidding.

This is a huge investment in a major UK nuclear power plant being constructed, Sizewell C, and this is definitely one deal that will have the investment and pension community talking for a very long time.

It might even be the deal of the decade in my humble opinion for a lot of reasons, not just the financial commitment involved but also because this nuclear plant will help the UK decarbonize and attain its net zero target.

I've been a huge proponent of nuclear energy for several years and have been stumped as to why Canada's pension giants haven't invested massively in this space.

Apart from OMERS which owns Bruce Power, none of the other Maple Eight funds have a big investment in a nuclear power plant.

The first article above gives you an indication as to why, nuclear power plants require massive investments, they take years to build, there could be huge cost overruns, there is regulatory and in this case currency risk as well.

To wit, Reuters states the 38 billion pound total cost estimated by the government compared with initial estimates of a price tag of around 20 billion pounds.

And it might balloon to 60 or 80 billion pounds by the time it's operational in mid to late 2030s (nobody knows for sure).

Moreover, as Reuters also notes: "Critics of the RAB model, which has also been used to fund London's Thames Tideway Tunnel project, say it could leave taxpayers liable for any cost over-runs and delays during construction and add costs to energy bills at a time when many people are already struggling."

Still despite all the criticism, I think Sizewell C will turn out to be spectacular investment for Britain and all the investors involved here over the course of its 60 year+ life (long duration asset).

I'll even go as far as stating despite the risks, this will likely turn out to be the best foreign investment ever in La Caisse's portfolio over the very long run (on a risk adjusted basis).

An asset like this has everything a pension fund can want: highly scalable where you can invest huge sums, super long duration asset which matches the long-dated liabilities, inflation protection embedded in the life of the contract.

That is the attraction of infrastructure assets but not all infrastructure investments are the same.

I know that solar and wind have been all the rage but if the world is to decarbonize in a meaningful way, nuclear energy needs to come back in a huge way in Europe and elsewhere.

In fact, Goldman Sachs recently noted this on the revival of nuclear power:

After decades of stagnation, the supply of nuclear energy is poised to increase significantly in the coming years on the back of rising power consumption, a shift toward cleaner energy, and the need for round-the-clock power sources, according to Goldman Sachs Research.

By 2040, global nuclear generating capacity is expected to rise from 378 gigawatts to 575 gigawatts, representing an increase in nuclear energy’s share of the global electricity mix from around 9% to 12%. A growing number of countries are backing a pledge to triple nuclear energy capacity by 2050, write Goldman Sachs Research analysts Brian Lee and Carly Davenport.

The expected increase in generating capacity coincides with a surge in support for nuclear power globally and a spike in investment in nuclear power facilities. The total nuclear fleet of around 440 reactors today is set to expand to roughly 500 by 2030, and well over 400 additional reactors are in the planning or proposal stage, according to the World Nuclear Association.
Nuclear energy “has become a key area of focus globally as countries revisit the technology after many years of underinvestment,” write Lee and Davenport.

Let me be blunt: after Russia invaded Ukraine, Germany was caught with its pants down because its politicians pandered to environmental crazies and shut down nuclear plants in the preceding decade.

France remains committed to nuclear energy and in the UK, the government is easing restrictions on nuclear power plant construction, particularly small modular reactors (SMRs).

This is all about energy security and finding cheaper sources of clean energy.

It's also about AI, data centers and increasing demand for clean energy.

It's a mega trend, one that will continue, one that Brookfield and other smart investors believe in.

In fact, we should be exploring building more nuclear power plants in Canada using the exact same public-private partnership approach which the UK has pioneered.

Alright, let me wrap it up.

In related news, La Caisse and other Quebec institutions are reinvesting in Ocean Group to accelerate its growth. You can read that press release here.

It's been quite a busy summer for La Caisse but this investment in Sizewell C is huge and trumps all other investments I've covered all year (no pun intended).

Below, Will Tullis of ITV News reports the UK government has announced the construction of the Sizewell C nuclear power plant will cost around £38 billion.

Also, Chancellor Rachel Reeves and Energy Secretary Ed Miliband visited Imperial College London as the Government announced it has reached an agreement with a consortium of investors regarding the construction of the Sizewell C nuclear power plant in Suffolk. The project is expected to cost approximately £38 billion. Listen to what Chancellor Rachel Reeves states, she is spot on.

Lastly, take a tour of Sizewell C to see its construction.

Update: Jasmin Jessen of Sustainability Magazine reports go-ahead for Sizewell C but why has the cost soared to £38bn:

Nuclear plant Sizewell C has received its final investment decision with shareholders including La Caisse, Centrica, EDF and Amber Infrastructure
The UK Government has signed the final investment decision for Sizewell C, giving the nuclear power facility the green light.
It is set to support 10,000 jobs once operational and generate 3.2 GW of electricity.
The project’s previous official price was £20bn (US$27bn), but this has now risen to £38bn (US$51.4bn).
Sizewell C’s Joint Managing Director told BBC News that earlier estimates did not account for inflation or risk.
The government will take an initial 44.9% stake and shareholders will include La Caisse, Centrica, Amber Infrastructure and EDF.
UK Energy Secretary Ed Miliband said: “It is time to do big things and build big projects in this country again – and today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come.
“This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good.”
What is Sizewell C?

Sizewell C’s roots go back to 2008 when the government decided new nuclear sites should be constructed, but the project failed to gain much traction until 2020.

EDF Energy first put forward proposals for the site in 2012 and remains a shareholder alongside the government.

Construction of the site began on 15 January 2024 and it is expected to cost a total of up to £30bn (US$40.5bn).

UK Chancellor of the Exchequer Rachel Reeves said: “La Caisse, Centrica and Amber’s multi-billion pound investment is a powerful endorsement of the UK as the best place to do business and as a global hub for nuclear energy.
“Delivering next generation, publicly-owned clean power is vital to our energy security and growth, which is why we backed Sizewell C. 

“This investment will create thousands of good quality jobs and boost the local economy as we deliver on our Plan for Change.”

Inside Sizewell C’s funding

The UK Government holds a 44.9% stake in the project, making it the single biggest equity shareholder.

EDF earlier agreed to a 12.5% stake alongside a proposed £5bn (US$6.7bn) debt guarantee from France’s export credit agency Bpifrance Assurance Export to back commercial bank loans.

La Caisse has agreed to a 20% stake, Centrica 15% and Amber Infrastructure 7.6%.

Julia Pyke and Nigel Cann, Joint Managing Directors of Sizewell C, said: “We’re delighted to welcome new investors alongside government and EDF who, like our suppliers, have strong incentives to keep costs under control and ensure we deliver Sizewell C successfully for consumers and taxpayers.
“By investing in Sizewell C, they are laying the foundations for a more secure, cleaner and more affordable energy system.
“Because 70% of our construction spend will be in the UK, with a £4.4bn commitment to the east of England, they will also help to create thousands of great jobs and new opportunities for people and businesses up and down the country.
“We are determined to deliver this major infrastructure differently, and to make sure this is a project Britain can be proud of.”

The government says that the Sizewell C investment deal builds on lessons learnt from the construction of Hinkley Point C, where costs rose from £18bn (US$24.3bn) to nearly £50bn (US$67.7bn) between 2015 and 2024.

Sizewell C’s funding model spreads the £38bn (US$51.4bn) cost between consumers, taxpayers and private investors, which the government says will represent a saving of around 20% compared with Hinkley.
The government says it is also providing additional capital to the National Wealth Fund to facilitate lending to Sizewell C.