Low-carbon investment policy framework and planning are critical to achieve climate neutrality

Brussels, 18 May 2021: Investment policy planning for low-carbon technologies such as nuclear power is critical for driving investments in technologies which will help achieve the climate neutrality goals embedded in the European Green Deal. According to the latest report prepared by FORATOM, the investment rating and the ability to attract debt for new projects have a central role to play in the process of financing new nuclear projects. In addition, multiple financing mechanisms are required to access a variety of sources of capital.

“Public-private financing schemes for low-carbon infrastructure act as the way forward under the European Green Deal” says 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”.

This report presents a list of recommendations for both policymakers and the nuclear sector. It reflects a shared perspective of the European nuclear industry based upon the assessment of 13 past and future nuclear projects across the EU. Reflecting upon the challenges that the industry is facing in different EU Member States, the authors of the report came up with recommendations which 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).

The report’s key recommendations can be summarised as follows:

• 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.

This report can be seen as a reference for policymakers when preparing national or regional low-carbon energy plans in the perspective of the EU Green Deal, that incorporates €1,000 Billion of public and private investments planned to 2027. It comes at a time when financial institutions are now being called upon 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 can be found here.