Until yesterday, I had been told, as had all FT readers, that our new Sizewell C energy project would be externally financed chiefly by Brookfield – a Canadian investment manager. My thoughts on reading this was that if I want long term management, I want it within a pension scheme, or at least within a British investment company.
Ministers are preparing to reduce the UK government’s stake in Sizewell C by more than expected, after a last-minute move to change the roster of private investors in the multibillion-pound nuclear project.
Mary McDougall picks up the story as a pension lesson
But the government in recent days moved to drop Brookfield in favour of selling a larger stake to a combination of Canadian pension fund La Caisse and London-based investment manager Amber Infrastructure, the people said.
The sums involved are staggering as the FT goes on to explain
La Caisse will now take a 20 per cent stake in Sizewell and Amber will take a 10 per cent stake, according to the people, while the stakes of Centrica and EDF are unchanged.
The increased private investor stake means the UK government will own 42.5 per cent of the project, which is set to cost £38bn, down from 47.5 per cent under previous plans. The government currently owns about 84 per cent of the project.
The project cost is huge and it requires an investment that Ed Miliband does not want the tax-payer to take directly
The increased private investor stake means the UK government will own 42.5 per cent of the project, which is set to cost £38bn, down from 47.5 per cent under previous plans. The government currently owns about 84 per cent of the project.
La Caisse, a huge Canadian fund is not messing about
Charles Emond, chief executive of La Caisse, which manages C$473bn (£254bn) on behalf of 6mn pension savers, told the Financial Times in May that it planned to invest more than £8bn in the UK over the next five years.
“We’d like to be a partner of trust and choice in the UK,” said Emond. The government’s plans to increase infrastructure spending were “a huge opportunity and we’d like to be there in the early stages to see if we can do something”, he added.
While I am happier to see investment in Sizewell reverting to the UK (Amber) and more moving to pension funds (La Caisse), I wonder if large UK pensions could not have done better. La Caisse is only just over half the size of LGPS, where was LGPS? The answer is LGPS is split into pools and further into funds. LGPS was not it seemed – involved.
We do need to get better organised and better motivated. I would like British CEOs and CIOs sound as determined as Charles Edmond. Good job Charles. Good job Ed Miliband reducing UK debt and diversifying investment into Sizewell C. It is about time we sorted power out in the UK, I wish luck to all power sources and interconnectors and hope we see Britain in good shape – with the help of UK pension schemes.
In my undergraduate years I worked briefly for Taylor Woodrow Research on the reactor pressure vessels at Hunterston, Hartlepool and Wylfa. These were all 100% British projects whatever happened to British engineering excellence?
Again the gap in funding is at the point when concept is proven somehow the UK chickens out of the long term market.
I have given examples here before of Agewage scores of 100 structures with no takers. It needed a Canadian Pension Fund to provide the liquidity to deal with the adjustment to ownership required as a result of legislation during the 30-year life of the investment.
Talk is cheap action is lost in the endless reports and consultations. The investment returns are there for those who have the conviction to rise above mediocrity. What skill or challenge is there in the ambition to be in the half that makes the top half possible?
1960 Nuclear Power Group formed as a partnership between Nuclear Power Plant Co Limited and the AEI-John Thompson Nuclear Energy Co Limited.
by 1968 The Group was constructing 6 out of the 12 nuclear plants ordered in the UK and one of two such plants sold abroad.
1969 A new company known as “The Nuclear Power Group Ltd.” was set up to design and build nuclear reactors and power stations at home and abroad. The chairman of the company was Sir Edwin McAlpine; deputy chairmen, J. W. Woodeson and J. Bennett; managing director, S. A. Ghalib.
1973 replaced by the National Nuclear Corporation.
1973 The 2 existing nuclear power plant consortia were replaced by a new body, the National Nuclear Consortium but Reyrolle Parsons, a member of the Nuclear Power Group, decided not to join the new body; the other consortium was British Nuclear Design and Construction.
GEC held 50 percent of the new company, the UK Atomic Energy Authority held 15 percent; other companies involved were Babcock and Wilcox, Clarke-Chapman John Thompson, Head Wrightson, Sir Robert McAlpine and Sons, Strachan and Henshaw, Taylor Woodrow Construction, and Whessoe; their shares held through a new company, British Nuclear Associates.
1989 Renamed NNC Ltd.
2005 Became part of AMEC, renamed AMEC NNC Ltd.
2007 Renamed AMEC Nuclear UK Ltd.
2014 Renamed AMEC Foster Wheeler Nuclear UK Ltd.
2017 John Wood Group acquired AMEC Foster Wheeler.
Some of AMEC Foster Wheeler’s assets were sold off after the merger. This included the company’s North Sea oil and gas operations, which were sold to WorleyParsons. The North American nuclear operations were also sold, to Kinectrics Inc.
Source: Grace’s Guide to British Industrial History
Do we still have leaders today of the quality of Sir Edwin McAlpine and others?
Thanks John, an English history converts to overseas endeavour
Thanks Byron, a lot of history there, or should that be “were here” as our history has been sold to America.
You could say that pension schemes need to Sizewell up