Nuclear power industry needs $120bn a year by 2030

RIYADH: Nuclear energy development funding needs to double to $120 billion a year by 2030 to meet the rising demand for infrastructure development, according to an analysis. 

In its latest report, the International Energy Agency said that both public and private investments are needed to meet the rising financial needs in the sector. 

According to the analysis, ensuring the predictability of future cash flows is key to bringing down financing costs and attracting private capital to the nuclear sector. 

The analysis from IEA comes at a time when countries such as Saudi Arabia are actively exploring ways to ramp up nuclear programs to diversify their energy mix. 

“Public funding alone will not be sufficient to build a new era for the nuclear energy sector. Private financing will be needed to scale up investments,” said IEA. 

It added: “The private sector is increasingly viewing nuclear energy as an investible energy source with the promise of firm, competitive, clean power that can serve energy-intensive operations 24/7.”

IEA suggested that a supportive regulatory framework that increases visibility, including limiting liabilities, is crucial for debt financing in the nuclear energy sector, as financial institutions lend based on reliable future cash flow expectations. 

“Long-term power purchase agreements can also be underwritten by large consumers, who can lock in future supplies of electricity at average cost. These arrangements can also open the door to proven commercial financing instruments, such as green bonds, supported by accommodating regulations and taxonomies,” said IEA.