A £599m financing package from the state-backed National Wealth Fund is set to accelerate the delivery of the UK’s first small modular nuclear reactors, in a major boost for the country’s clean energy ambitions.
The investment in Rolls-Royce SMR, announced by the fund, is designed to kick-start the firm’s project with the government’s Great British Energy – Nuclear (GBE-N) body. It is expected to create approximately 1,000 jobs directly at Rolls-Royce SMR, with the wider first SMR project estimated to support around 3,000 jobs at peak construction and thousands more across the UK supply chain.
De-risking Billions in Private Investment
The £599m injection aims to reduce risk for private lenders, a core function of the National Wealth Fund (NWF). The publicly-funded institution, sponsored by HM Treasury and established in October 2024, operates to mobilise private capital for clean energy and industrial transformation. By deploying public funds through instruments like debt, equity, and guarantees, it seeks to “crowd in” billions in additional investment from the City and international markets. The NWF aims for a mobilisation ratio of 1:3, which could unlock at least £70 billion of private investment across its portfolio.
This latest commitment follows Rolls-Royce SMR’s selection as the preferred technology partner for the project last June. Around £2.6bn was set aside in the 2025 Spending Review for the contract and wider programme delivery, building on previous government funding of £210 million for the SMR design.
The SMR Difference: Factory-Built, Scalable Power
The technology at the heart of this investment represents a significant shift from conventional nuclear power. Small modular reactors (SMRs) are engineered to produce roughly one-third of the electricity of a traditional large-scale reactor. Each Rolls-Royce SMR unit is a Pressurised Water Reactor (PWR) designed to generate 470 megawatts of low-carbon electricity, enough to power approximately one million homes for at least 60 years.
The key innovation lies in their construction. SMRs are factory-built in modular sections, which are then transported by road, rail, or barge to the site for assembly. This method is intended to drastically reduce construction time, cost, and risk compared to building vast, bespoke power stations on location. The compact footprint of each unit is approximately 5.3 acres.
Developers contend this approach offers flexibility, allowing capacity to be scaled up incrementally to meet specific local or regional electricity demands. The cost per unit is expected to be between £2 billion and £3 billion. Beyond the first project, the broader Rolls-Royce SMR programme is forecast to create 40,000 regional UK jobs by 2050 and generate £52 billion in economic benefit for the country.
Wylfa Site and Political Drive for Energy Security
The first SMRs will be built at Wylfa on the island of Anglesey, a site with a nuclear history stretching back to 1971. The government’s delivery body, GBE-N, purchased the site from Hitachi in 2024 after the Japanese firm abandoned plans for a new power station there. Rolls-Royce SMR and GBE-N have now signed a contract to begin detailed design, regulatory engagement, and planning processes for the first three units at Wylfa, pending a final investment decision.
The project sits at the centre of the government’s political ambition to become a “Clean Energy Superpower” and enhance the UK’s energy security. Chancellor Rachel Reeves stated the investment would “strengthen our energy security, create skilled jobs and help to build a new generation of homegrown nuclear technology that will power our economy for decades to come.” She added that the NWF was designed to back homegrown projects delivering transformational impact.
Energy Secretary Ed Miliband has framed the push as essential for independence, arguing the clean energy mission is “the only route to getting off the rollercoaster of fossil fuels and take back control of our energy independence.” His department has faced intense scrutiny in recent weeks as Middle East crises disrupted oil and gas markets, sparking demands for more North Sea exploration. Prime Minister Keir Starmer has indicated he lacks the legal authority to authorise new exploration, leaving the decision with Mr Miliband.
The regulatory pathway for the technology is advancing, with the government having approved the nuclear justification for the Rolls-Royce SMR design. The design is currently in the detailed assessment phase of the UK’s Generic Design Assessment, which is expected to be completed in August 2026.
Rolls-Royce SMR is jointly owned by Rolls-Royce plc, the Czech power company ČEZ—which completed the acquisition of a 20% stake in March 2025—Qatar’s sovereign wealth fund, and France’s BNF Resources. The company has international ambitions, with memorandums of understanding in Estonia and Turkey, and plans for up to six units in the Czech Republic. It forecasts targeting £250 billion of exports, positioning the UK as a potential global leader in a competitive new nuclear market.
