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Apollo Makes Major Bet on UK Nuclear Energy with £4.5 Billion Injection

In a landmark move, U.S. private equity giant Apollo Global Management has agreed to provide £4.5 billion ($6 billion) in financing to the UK’s long-delayed Hinkley Point C nuclear power station, marking one of the largest private credit deals ever seen in Britain’s infrastructure sector.

Sources familiar with the transaction confirmed to CNBC that the financing package will be structured as investment-grade debt with an interest rate below 7%, offering EDF a crucial lifeline as the project faces escalating construction costs.

The deal, initially reported by the Financial Times, underscores the growing appetite of private credit firms to fund critical European infrastructure projects amid tightening public budgets and retreating bank lending.

Hinkley Point C Faces Cost Overruns, Delays, and Geopolitical Headwinds

EDF, the majority owner of Hinkley Point C, has been struggling to fund the ballooning cost of the nuclear project after Chinese state-owned partner China General Nuclear Power Corp (CGN) abruptly pulled its funding in late 2023. The move came amid rising diplomatic tensions between the UK and China, with the British government taking over CGN’s stake in another nuclear development, Sizewell C.

With an estimated total project cost exceeding £40 billion as of early 2024, Hinkley Point C is now one of the most expensive nuclear projects globally. Originally scheduled to be operational by the mid-2020s, the timeline has slipped repeatedly. The first reactor is now projected to begin supplying electricity in 2029, eventually providing power to approximately six million British homes.

Concerns about foreign involvement in critical national infrastructure, particularly from China, have driven UK policymakers to seek alternative funding sources for the nation’s ambitious nuclear expansion plans. The British government has vowed to advance new nuclear developments as part of its broader energy security strategy and its goal to reach net zero emissions by 2050.

Private Credit Steps in as Banks Retreat

Apollo’s involvement represents a broader shift in global finance. Since the 2008 financial crisis, private credit markets have ballooned to an estimated $1.5 trillion globally, according to Morgan Stanley, as risk-averse banks have scaled back large-scale, long-duration lending. Private credit firms are increasingly stepping into this gap, funding projects traditionally dominated by public markets or government-backed lenders.

“This transaction is a clear demonstration of how far private credit has matured,” said Marc Scheipe, CEO of private markets platform Allvue. “Deals of this scale, involving critical national infrastructure, were historically the exclusive domain of sovereign wealth funds, banks, or public capital markets. Private credit firms like Apollo are changing that narrative.”

Apollo itself has ambitious expansion plans for Europe. Just this month, Jim Zelter, President of Apollo Global Management, stated the firm sees potential to deploy up to $100 billion in Europe over the next decade, with Germany being a key focus. The Hinkley deal illustrates this growing transatlantic financial trend.

Broader European Infrastructure Boom Attracts Private Capital

Beyond nuclear energy, Europe’s broader infrastructure sector is increasingly drawing interest from global private investors. Sectors such as renewable energy, transportation, data centers, and housing are seen as key long-term plays as European governments pursue green transitions, digital infrastructure upgrades, and economic rebalancing.

“The next decade will likely see unprecedented private capital flows into European infrastructure,” said David Livingston, energy fellow at the Atlantic Council. “Massive investment gaps remain, especially as public finances across Europe face competing demands.”

A Strategic Inflection Point for UK Energy

While Hinkley Point C remains a contentious and expensive undertaking, the project is viewed by many analysts as a strategic necessity. Once operational, it will supply 7% of the UK’s electricity needs, providing a stable baseload supply to complement intermittent renewables like wind and solar.

At a time when Europe faces heightened energy insecurity following the Russia-Ukraine conflict, major nuclear investments like Hinkley are increasingly seen as anchors of long-term energy resilience.

Despite the controversy surrounding its cost overruns, political tensions, and construction delays, the infusion of private capital from Apollo may signal renewed confidence that Hinkley Point C — and UK nuclear more broadly — can still deliver on its long-promised potential.