Apollo to fund UK’s Hinkley Point nuclear project with $6 billion loan

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(Corrects paragraph 1 to clarify that Apollo Global is a private capital group, not just a private equity firm)

(Reuters) -Apollo Global will provide 4.5 billion pounds ($6.08 billion) in financing to support Britain’s long-delayed Hinkley Point nuclear project, the U.S. private equity group said on Friday.

The nuclear project will be funded by proceeds from Apollo-managed affiliates, funds and strategic accounts’ agreement to invest up to the same amount in fixed-rate callable notes issued by French power giant EDF.

The investment was first reported by the Financial Times earlier in the day.

The project, controlled and financed by EDF, is Britain’s first new nuclear plant in more than two decades as London seeks to replace its ageing fleet to boost energy security, reach climate targets and create new jobs.

The Hinkley project has had several delays and cost overruns, especially after China General Nuclear Power Group pulled out in 2023. It is currently expected to start operations in 2029, with an estimated cost of between 31 billion and 34 billion pounds at 2015 prices.

Apollo’s funding is expected to be provided as unsecured debt at an interest rate of just under 7%, the FT report said.

The British government last week said it would invest a further 14.2 billion pounds to build the Sizewell C nuclear plant in southeast England, a second major new nuclear project for the country.

($1 = 0.7407 pounds)

(Reporting by Unnamalai L, DhanushVignesh Babu and Prerna bedi in Bengaluru; Editing by Shailesh Kuber)