Foratom outlines approach to low-carbon finance

18 May 2021

Investment policy planning for low-carbon technologies, such as nuclear power, is critical for driving investments in technologies that will help achieve the climate neutrality goals embedded in the European Green Deal, European trade association Foratom said today as it unveiled its Investment Framework Task Force report.

Presenting a list of recommendations for policymakers and the nuclear sector, the report draws on the lessons learned from 13 past and future nuclear projects across the EU. These recommendations incorporate broader long-term investment-related needs and considerations related to the achievement of carbon mitigation goals within the Clean Energy Package (EU Electricity market designs, EU carbon mechanisms).

"Public-private financing schemes for low-carbon infrastructure act as the way forward under the European Green Deal” said Foratom Director General Yves Desbazeille. "EU governments play a major role in contributing to maintaining an affordable financing cost profile for large EU-based infrastructure such as nuclear. This offers new ways to achieve an investment grade rating.”

Foratom suggest the report can be a reference for policymakers when preparing national or regional low-carbon energy plans in the perspective of the EU Green Deal, that incorporates EUR1000 billion (USD1221 billion) of public and private investments planned to 2027. Financial institutions are now being called upon, the Brussels-based organisation notes, to establish climate lending criteria, which will support the financing of EU’s industries and infrastructures. While those lending criteria may have major direct and indirect implications for all financing instruments throughout the EU, organisations may wish to refer to the taskforce’s recommendations.

The report’s main recommendations are: in the financing of new nuclear projects, the investment rating and the ability to attract debt for new projects have a central role to play; multiple financing mechanisms are required to access a variety of sources of capital; a stable and long-term investment policy framework for nuclear optimizes the distribution and allocation of risks for the sake of the community of stakeholders with a view to ensure consumer value for money; an industrial management framework for nuclear new build projects at the level of project development and ownership level is a key success factor in managing risk; an investment policy planning for low-carbon technologies such as nuclear power is critical in driving investments and achieving the climate neutrality goals as embedded in the EU Green Deal.

The report is here.

Researched and written by World Nuclear News