Rolls-Royce secures funding from Exelon, BNF to establish small nuclear unit

Rolls-Royce Holdings PLC has secured funding from Exelon Corp. subsidiary Exelon Generation Ltd. and BNF Resources UK to establish a business that manufactures small modular nuclear reactors.

The three-year, £195 million equity raise will allow the Rolls-Royce Small Modular Reactor business to secure £210 million in U.K. Research and Innovation funding, which was first announced by the U.K. prime minister as part of "The Ten Point Plan for a Green Industrial Revolution."

"The capitalization of Rolls-Royce SMR takes us a step closer to achieving a unique, and most importantly investable, proposition in nuclear energy. It is a major vote of confidence in British nuclear technology and the potential for building a world-leading domestic supply chain," said Rolls-Royce SMR CEO Tom Samson.

Roughly nine-tenths of an individual Rolls-Royce SMR power plant will be built or assembled in factory conditions, according to the news release, and about 80% could be delivered by a U.K. supply chain.

The business will continue to seek further investment, and is identifying sites for factories to manufacture the modules. Rolls-Royce SMR said it is also engaging with customers outside the U.K. who need the technology to meet their own net-zero commitments.

In October, the U.K. government announced a new funding model to attract private investment that would reduce the cost of new nuclear projects in Britain.

The legislation, called the Nuclear Energy (Financing) Bill, would use the regulated asset base model to fund future nuclear power stations. This would reduce the U.K.'s reliance on overseas developers for financing by increasing the pool of private investors to include British pension funds, insurers and other institutional investors.