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Financing models and risk-sharing structures for capital-intensive clean energy projects

Capital-intensive clean energy assets, such as nuclear power, large grid expansions, long-duration storage, carbon capture facilities and industrial decarbonization hubs, require substantial upfront capital, long payback periods and stable policy frameworks. Global energy investment is projected to reach about USD 3.3 trillion in 2025, with roughly USD 2.2 trillion flowing into clean energy technologies.[1] This level of spending reflects strong momentum across solar, storage, grids and electrification, yet investment remains concentrated in advanced economies, while many emerging and developing markets continue to face limited access to affordable capital. High financing costs, currency exposure and construction risk still constrain long-lived clean energy infrastructure, particularly in regions where system demand is growing fastest. These barriers slow deployment of firm low-carbon technologies that are important for system reliability. 

Financing models that combine public and private capital help improve bankability and reduce financing costs. Regulated Asset Base frameworks, blended finance structures, credit enhancement tools and multi-stakeholder ownership arrangements share risks across governments, utilities, investors and consumers, while creating more predictable long-term revenue streams. By improving investment certainty and mobilizing institutional capital, these structures support the scale-up of firm low-carbon technologies and the delivery of critical infrastructure for a resilient and affordable net-zero energy system. 

Main outcomes of the solution 

  • Affordability: Lowers the cost of capital for major clean energy assets, reducing overall system investment needs and helping manage long-term consumer cost exposure through more efficient capital deployment. 
  • Reliability and Flexibility: Accelerates investment in firm low-carbon generation, long-duration storage and modern grid infrastructure, supporting stable operation as renewable variability and electrification-driven demand increase. Robust financing frameworks ensure that reliability-enabling assets are not delayed by capital constraints. 
  • Institutional Efficiency and Transparency: Improves investment confidence through standardized contracts, predictable revenue frameworks and clearer regulatory signals, supporting sustained private-sector participation in system planning and delivery. This helps build a pipeline of bankable projects rather than one-off bespoke transactions 

Key deployment and scaling factors 

  1. Establish revenue-stabilizing frameworks such as Regulated Asset Base models to provide predictable returns and sharing construction and demand risk for long-lived clean-energy assets. 
  2. Expand blended-finance structures that use concessional capital, guarantees and risk-mitigation tools to mobilize large volumes of private and institutional investment. 
  3. Create multi-stakeholder ownership and risk-sharing models that align incentives among governments, utilities, off-takers, communities and institutional investors. 
  4. Standardize project preparation, due diligence and contracting to shorten development timelines and lower perceived legal and execution risk. 
  5. Align regulatory and policy frameworks with long-term investment needs through clear roadmaps, stable remuneration mechanisms and predictable tariff-setting. 
  6. Mobilize institutional investors through diversified investment vehicles, credit enhancement and transparent data that support scale and long-term capital allocation. 

Case Study 

Sizewell C and United Kingdom Government (2025)​, United Kingdom 

In 2025, Sizewell C secured a Final Investment Decision under a Regulated Asset Base (RAB) financing model that combines public and private capital. The structure allows regulated returns during construction and shares financing risk among the government, the developer, consumers, and private investors. The project comprises two European Pressurised Reactor (EPR) units with a combined capacity of approximately 3.2 GW, replicating the design used at Hinkley Point C. Once operational, Sizewell C is expected to provide long-term, low-carbon electricity, supplying power equivalent to that used by around six million homes over its operating life. 

The financing package combines government equity with private investment from La Caisse de dépôt et placement du Québec, EDF, Centrica and Amber Infrastructure, supported by long-term debt from commercial lenders and national and export-credit agencies. The project includes extensive domestic participation, with more than 70% of contract value awarded to UK businesses and a large workforce engaged during peak construction.[2,3] 


Solution and insights developed with contributions from the World Nuclear Association.


References: 

  1. World Energy Investment 2025 - 10th Edition I IEA (2025) 
  2. Sizewell C gets green light with final investment decision I GOV.UK (July 2025) 
  3. Sizewell C: Documents for the Sizewell C new nuclear power station I GOV.UK (July 2025) 

Category
Business Strategies & Market Solutions
Sub-category
Financial Tools
Outcomes
Affordability, Reliability & Flexibility, Institutional Efficiency & Transparency
Case Study Regions
Europe
Case Study Countries
United Kingdom

Future of Power Systems

A World Economic Forum Initiative