This CRP will coordinate research efforts by Member States, supported by in-house activities, in order to seek innovative ways of financing nuclear energy projects in the fast changing world of the global financing industry. It will also draw on the experience of those Member States who have recently been involved in the financing of nuclear projects in order to seek to identify the lessons which can be drawn with regard to sources of financing for nuclear projects, the nature of the financing process (including the role of Financial Advisors), the barriers to financing nuclear projects. The relative importance of different types of risk (e.g. construction risk, market risk) in determining financing costs will be addressed, as well as different models for allocating risk between stakeholders in nuclear projects. Member States contemplating an expansion in their existing nuclear fleets can be expected to benefit from the CRP, but it will likely be even more valuable for Member States with limited (or non-existent) experience of financing nuclear power projects (‘newcomers’).
By enhancing the transparency of the process of financing nuclear investments, it is intended that this CRP will help Member States contemplating (further) investment in nuclear energy to negotiate cost-effective financing for such investments in an efficient manner. Given the importance of capital costs in determining the levelised cost of electricity generated from nuclear sources (around 70%) and the importance of financing costs in those capital costs, cost-effective financing will help make it possible for Member States to undertake nuclear energy projects as part of their sustainable development strategies. The CRP has been designed under the auspices of IAEA Subprogramme 1.3.2 (Energy Economy Environmental Analysis) whose overall objective is to achieve better understanding of nuclear technology’s contributions to socioeconomic development and climate protection and its compatibility with national sustainable development objectives in Member States. Within that Subprogramme, Project 1.3.2.2 (Topical issues related to sustainable development analysis) conducts, among others, work on diverse issues of sustainability and climate change, especially on the potential contribution of nuclear technologies. Insofar as financing remains arguably the most significant issue faced by Member States seeking to maximize that contribution, this CRP falls within the parameters of 1.3.2.2.
To develop approaches to trading off risk and cost within financing arrangements.
To develop materials on financing for use in TC projects.
To identify best practices within the nuclear power plant financing process.
To improve understanding of costs and benefits of innovative financing approaches.
The CRP was planned to help participants understand financial approaches
NPP financing is specific: the construction time is long, the payback time is long, and the upfront costs are high. Since financing is a significant part of NPP cost (up to 55%) and financial decision (ability to attract financing) is one of the key for the construction of new NPP, understanding financing models and contractual approaches is crucial for making decision to build new NPP.