Sir Keir Starmer’s upcoming tour of the Gulf is not just another diplomatic jaunt; it’s a calculated move to secure a lifeline for the beleaguered Sizewell C nuclear project. The stakes are high, and so are the potential rewards, as the Prime Minister seeks to court the financial muscle of the UAE’s sovereign wealth funds, particularly Mubadala. This meeting is set against a backdrop of uncertainty surrounding the UK’s commitment to nuclear energy and infrastructure investment, which has left many potential investors scratching their heads.
Starmer’s message to the influential bosses at Mubadala is crystal clear: “You can trust us.” This comes at a time when the UK government is grappling with the long-term viability of nuclear power. The hesitation of successive administrations to fully back major infrastructure projects has raised eyebrows, and investors are understandably wary. The government’s recent struggles to finalize a capital raise for Sizewell C have only added to this skepticism.
Mubadala’s involvement could be a game-changer. With Khaldoon Al Mubarak, the fund’s chief executive, in attendance, the meeting could pave the way for a partnership that channels funds into Sizewell via the Emirates Nuclear Energy Corporation (Enec). Such collaborations are not new; UAE companies have a history of teaming up on global projects, and this could be just the ticket for revitalizing the Sizewell initiative.
However, the road ahead is fraught with challenges. The UK government had initially aimed to make a final investment decision by year-end, but that timeline has slipped to spring, largely due to Chancellor Rachel Reeves’s ongoing spending review. The elephant in the room remains the staggering cost of the Sizewell project, estimated to be between £20 billion and £40 billion. The government’s strategy to offload a significant portion of shares while bearing the entire cost on the public balance sheet raises questions about financial sustainability and accountability.
Meanwhile, the Hinkley Point C project is also in the spotlight, grappling with a £5 billion funding shortfall after China General Nuclear’s withdrawal. The UK government’s decision to block Chinese investment in Sizewell C, citing national security concerns, has created ripples that extend far beyond this single project. EDF’s calls for governmental support to shore up Hinkley have fallen on deaf ears, with Paris reportedly hesitant to inject more funds into a project already plagued by delays and ballooning costs—now projected to reach £45 billion.
Centrica’s emergence as a potential investor in Hinkley adds another layer of intrigue. As the electricity supplier seeks to replace income from aging nuclear plants, its involvement could provide a much-needed boost. Yet, the overarching question remains: can the government manage to attract enough investment to ensure the viability of both Sizewell C and Hinkley Point C without compromising national interests?
Starmer’s Gulf tour could set the tone for future developments in the UK’s nuclear landscape. As the government navigates these choppy waters, the outcome of this diplomatic endeavor may very well shape the future of nuclear energy investment in Britain. The stakes are high, and the implications for energy security, economic growth, and international relations are profound.
