CLOSING THE CIRCLE | SPECIAL REPORT
The Nuclear Liabilities Fund set aside and ring-fenced funds to decommission eight nuclear power stations currently operated by EDF Energy such as Heysham. Source: NIA
on assets like property where investors cannot sell assets at short notice. The MAP also has ‘medium appetite’ to focus investments in the UK and support the government.
Growing the Fund According to NLF’s annual report for FY2024/5, published in November 2025, overall to date the fund has paid out £2.4bn (US$3.3bn)to discharge decommissioning liabilities. At the end of the financial year, in March 2025, the NLF was valued at approximately £20.7bn (US$28bn), of which the NatLF account held £16.6bn (US$22.5bn). During the year £0.6bn (US$0.8bn) was paid out to EDF to cover costs relating to defueling and decommissioning preparation work and defueling at Hunterston B, Hinkley Point B and Dungeness B. It said the Total Portfolio Return exceeded its target
for the first time, despite a dip in the performance of the MAP, because there was a higher interest rate from the National Loans Fund. The illiquid portfolio, which accounts for three quarters of the MAP, “has shown impressive growth historically. However, private market headwinds have contributed to a slowdown in returns over the past three years. This further underscores the importance of maintaining a long term view to navigate short-term pressures and position the fund for future growth”. The annual report also highlighted some key developments since 2020. Three stations have ceased generation and have entered the decommissioning phase, while planning for decommissioning is under way for the other AGRs. In 2021, the government exercised its option to transfer EDF Energy’s AGR stations to the Nuclear Decommissioning Authority after EDF Energy completes defueling (see article). The long-term decommissioning programme will be managed by NDA subsidiary Nuclear Restoration Services Limited (NRS) Hunterston B is expected to transfer to the NDA in 2026. Over the last 10 years the MAP has grown by an average
of 6.9% annually and in March it was valued at £4.1bn (US$5.6bn). The annual report notes that in recent years the MAP has underperformed, but says the fund’s investment strategy is designed to ensure long-term asset growth. It warns, “investment markets are volatile and therefore it should not be expected that the fund will deliver the required return year after year”. The investment adviser assumes that over the short to medium term, “there is a c60-70% chance of meeting the required MAP Return” but as the time period grows, the probability of meeting the target
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increases. Both those investment principles – an illiquidity premium and appetite for government projects – support the NLF’s investment in Sizewell C. Announcing the investment, NLF highlighted Sizewell C’s
‘regulated asset base’ financing model, which provides early returns to investors ahead of startup, and visibility of future returns. NLF also flagged the ‘mature and proven approaches’
to design, construction, operations and financing, including: ● Investment alongside financial investors with ‘strong alignment of interests and relevant experience in the sector’
● A standardised design with 80% of the above ground design replicated from Hinkley Point C
● Regulatory and government support mechanisms provide protections for investors in the event of severe cost overruns and delays to construction in extreme downside scenarios
● There is an established and qualified supply chain replicating designs and borrowing lessons learned from Hinkley Point C
Commenting on the decision to invest in the new build
nuclear project, Melissa Hope, Chief Executive of the NLF, said in a statement: “This investment aligns with our strategic objectives seeking long-term investment returns to fund the decommissioning liabilities of eight existing nuclear power stations, while also supporting low-carbon energy generation, boosting energy security, jobs, and economic growth in the UK.” Does this signal the emergence a virtuous nuclear circle? NLF believes so. ■
The NLF has paid out to EDF to cover costs relating to defueling and decommissioning preparation work and defueling of several plants, including Hunterston B. Source: EDF Energy
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