Rolls-Royce has finalized an agreement to receive up to £599 million from the UK’s national wealth fund to expedite the development of the country’s inaugural small modular nuclear reactors (SMRs).
This financial backing will assist Rolls-Royce in the design and construction of SMRs at Wylfa, located on the island of Anglesey, known as Ynys Môn in Welsh.
The objective of SMR technology is to manufacture nuclear power plants in factories, thereby reducing costs and accelerating installation timelines.
The Wylfa site has a history of generating nuclear power, operating from 1971 until its last reactor was decommissioned in 2015. Japanese firm Hitachi attempted to establish a new nuclear facility there but ultimately withdrew its plans in 2020 due to unsuccessful negotiations over government funding. In 2024, the site was acquired by the state-owned Great British Energy – Nuclear (GBE-N) from Hitachi.
Chancellor Rachel Reeves emphasized that this investment is crucial for enhancing energy security, creating skilled employment opportunities, and fostering a new generation of domestic nuclear technology that will support the economy for years to come.
According to the national wealth fund, this financial support is projected to generate approximately 1,000 jobs within Rolls-Royce.
The Labour Party has endorsed nuclear energy, recognizing its potential to produce electricity without carbon emissions while also establishing a significant new export sector in SMRs.
On Monday, the government announced a contract between Rolls-Royce SMR and GBE-N, enabling immediate commencement of work on the SMRs.
This development comes as positive news for Rolls-Royce, the prominent FTSE 100 jet engine manufacturer, which was designated as the preferred developer by the government last year.
Rolls-Royce holds a majority stake in Rolls-Royce SMR, in partnership with Qatar’s sovereign wealth fund, France’s BNF Resources, and the Czech utility CEZ.
Rolls-Royce SMR employs over 1,000 staff who are dedicated to advancing technology that will also be implemented at the Temelín facility in the Czech Republic.
Tufan Erginbilgiç, CEO of Rolls-Royce, described this agreement as a “critical milestone” for the company and the UK, signaling a “golden age of new nuclear.”
He added that this deal provides essential contractual certainty in the domestic market, opening avenues for deploying a global fleet of Rolls-Royce SMRs.
Tom Greatrex, CEO of the Nuclear Industry Association, stated that this agreement represents a “historic step for clean energy, industrial growth, and skilled employment in Wales.”
He remarked that it marks the onset of an exciting new chapter for both the project and the residents of Ynys Môn, allowing for the initiation of a project that will generate thousands of jobs and attract considerable investment both locally and across the UK, while also ensuring a stable supply of reliable, low-carbon energy for the nation.
The national wealth fund, headquartered in Leeds, Yorkshire, was officially launched in 2024 to promote investments in the UK’s clean energy and growth sectors. Although it is owned by the Treasury, it operates independently from the government.
The fund has committed to providing up to £599 million to Rolls-Royce SMR through a loan, which will be repaid either when the company begins deploying its SMR units or through refinancing arrangements.
