Apollo to pump £4.5 billion into UK nuclear project in major private loan deal

U.S. asset management giant Apollo is set to provide a £4.5 billion ($6 billion) loan to plug a shortfall facing U.K. nuclear project Hinkley Point.

The deal was first reported by the Financial Times on Friday and supported by two sources speaking to CNBC on condition of anonymity because of the sensitivity of the matter.

Apollo will provide an investment-grade, unsecured debt financing package for the project at an interest rate below 7%, a source said.

Apollo and Hinkley Point majority owner EDF declined to comment.

The Apollo deal would be among the biggest private capital investments in a project of U.K. national interest.

Construction of two nuclear reactors at the Hinkley Point C site, the first nuclear power station to be built in Britain in decades, has been delayed multiple times and swelled in budget.

State-owned China General Nuclear Power Corp (CGN) halted its funding for Hinkley Point C in late 2023 amid tensions with the British government, which took over the company’s stake in another U.K. nuclear project, Sizewell. That left EDF to pay to complete the project alone, for a bill estimated at more than £40 billion in early 2024. The first reactor in the projected is expected to come online in 2029.

CGN’s participation had drawn public scrutiny over concerns about broader Chinese involvement in critical U.K. infrastructure.

While nuclear projects remain controversial in Europe, the current British government has pledged to approve construction of more such plants at home. Hinkley Point C is expected to generate electricity for around six million homes when complete.

Private markets are meanwhile eyeing opportunities to capitalize on an expected boom in European infrastructure projects over the next decade, from energy and transport to housing and data centers. Apollo Global Management President Jim Zelter earlier this month said that he saw the opportunity to put $100 billion “in the ground” in Germany over the next decade. 

— CNBC’s Lily Meckel contributed reporting.