Centrica shares rose on Tuesday after the company announced an agreement to acquire a 15% stake in the new Sizewell C nuclear power station, which includes committed construction funding of £1.3 billion.
The deal will see Centrica join HM Government (44.9%), La Caisse (20%), EDF (12.5%) and Amber Infrastructure Group (7.6%) as co-owners of the Suffolk nuclear project under a Regulated Asset Base model.
Centrica expects its equity share to grow to around £3 billion by the time the plant becomes operational, with the company targeting returns above 12%. The investment will be capped at £1.3 billion for the 15% stake, with inflation-protected regulated returns of 10.8% during construction.
Centrica shares were 3.5% higher at the time of writing.
The agreement includes protections against construction delays and cost overruns, plus an initial 20-year offtake agreement for Centrica’s share of the plant’s electricity production.
The transaction is subject to final statutory approval from the Secretary of State, with Revenue Commencement expected in the fourth quarter of 2025. The acquisition is a significant move for Centrica as it seeks to rebuild its infrastructure portfolio with regulated assets that deliver predictable earnings.
“The UK needs more reliable, affordable, zero carbon electricity, and Sizewell C will be critical to supporting the country’s energy system for many decades to come,” said Chris O’Shea, Group Chief Executive, Centrica.
“That’s why I’m delighted to be announcing this milestone investment which will see Centrica commit £1.3 billion for a 15% equity stake in the project, and deepens our long-standing involvement in the UK nuclear industry. This isn’t just an investment in a new power station – it’s an investment in Britain’s energy independence, our net zero journey, and thousands of high-quality jobs across the country.”
When fully operational, it is estimated that Sizewell C will generate enough energy to meet approximately 7% of the UK’s current demand.