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Project financing in nuclear new build, why not? The legal and regulatory barriers

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  • Sainati, Tristano
  • Locatelli, Giorgio
  • Smith, Nigel

Abstract

This paper investigates the legal barriers to apply project finance for building nuclear power plants. Countries such as the UK, Turkey and emerging economies (i.e. Malaysia and Indonesia) are increasingly seeking to attract private investors for nuclear projects using project finance. This is an innovative approach, and until now the only cases registered are Hinckley Point C in the UK and Akkuyu in Turkey. This paper scrutinises the mismatches between the requirements of project finance and nuclear law. Nuclear law introduces specific requirements affecting the security interest of private lenders, hindering the bankability of nuclear projects on a non-recourse basis. The paper emphasises that the performance-based regulatory approach is more compatible with project finance compared to the prescriptive based one. Furthermore, the paper examines the gaps between nuclear and holistic energy law, looking at the financing of energy infrastructures. Improving nuclear law enables to apply project finance to nuclear power plants, facilitating their deployment. Consequently, nuclear law plays a central role in promoting sustainable energy mixes characterised by reduced carbon emissions.

Suggested Citation

  • Sainati, Tristano & Locatelli, Giorgio & Smith, Nigel, 2019. "Project financing in nuclear new build, why not? The legal and regulatory barriers," Energy Policy, Elsevier, vol. 129(C), pages 111-119.
    • Handle: RePEc:eee:enepol:v:129:y:2019:i:c:p:111-119
    DOI: 10.1016/j.enpol.2019.01.068
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    References listed on IDEAS

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    Cited by:

    1. Mignacca, Benito & Locatelli, Giorgio & Sainati, Tristano, 2020. "Deeds not words: Barriers and remedies for Small Modular nuclear Reactors," Energy, Elsevier, vol. 206(C).
    2. Mignacca, B. & Locatelli, G., 2020. "Economics and finance of Small Modular Reactors: A systematic review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    3. Vladimir M. Cvetković & Adem Öcal & Yuliya Lyamzina & Eric K. Noji & Neda Nikolić & Goran Milošević, 2021. "Nuclear Power Risk Perception in Serbia: Fear of Exposure to Radiation vs. Social Benefits," Energies, MDPI, vol. 14(9), pages 1-19, April.
    4. Pengran Zhou & Pengfei Zhou & Serhat Yüksel & Hasan Dinçer & Gülsüm Sena Uluer, 2019. "Balanced Scorecard-Based Evaluation of Sustainable Energy Investment Projects with IT2 Fuzzy Hybrid Decision Making Approach," Energies, MDPI, vol. 13(1), pages 1-20, December.
    5. Day-Yang Liu & Chia-Kan Wang & Chung-Yi Fang & Pei-Leen Liu, 2021. "A Study of Project Financing on the Defense Industry in Systems Thinking Perspective," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 11(2), pages 1-6.
    6. Locatelli, Giorgio & Mancini, Mauro & Lotti, Giovanni, 2020. "A simple-to-implement real options method for the energy sector," Energy, Elsevier, vol. 197(C).
    7. Invernizzi, Diletta Colette & Locatelli, Giorgio & Brookes, Naomi & Davis, Allison, 2020. "Qualitative comparative analysis as a method for project studies: The case of energy infrastructure," Renewable and Sustainable Energy Reviews, Elsevier, vol. 133(C).

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