The nuclear sector is facing almost unprecedented ambitions for growth: to achieve the goal of tripling global nuclear capacity by 2050 (as per the COP28 declaration), the World Nuclear Association estimates the sector will need around $6 trillion of investment; approximately $250 billion annually (compared to current global annual spend of around $80). This would be a sum comparable to current annual investment in wind and solar combined. Yet discussions about the future of nuclear energy are often framed as questions of technology: whether small modular reactors (SMRs) can accelerate deployment, whether advanced reactors will improve efficiency and flexibility, and whether supply chains can meet growing demand.

While these are important considerations, they overlook a more fundamental challenge. The success of the next generation of nuclear projects will ultimately depend not on technology alone, but on whether projects can attract investment and be delivered successfully.

This question sits at the heart of many industry discussions, including the theme of the 2026 International Nuclear Law Association (INLA) Congress, "Powering the Nuclear Future: Law, Investment and the Next Generation". As governments around the world expand their nuclear ambitions in pursuit of energy security, decarbonisation and economic growth, the focus is increasingly shifting from what can be built to what can be financed and delivered.

Why is investment becoming the defining challenge for nuclear projects?

The nuclear sector is not facing a shortage of ambition. Across established and emerging markets, governments are expanding or revisiting nuclear programmes as part of wider efforts to strengthen energy security, support decarbonisation and meet growing electricity demand. Investors also continue to recognise the long-term value of reliable, low-carbon generation.

Global investors have demonstrated willingness to deploy significant capital into low-carbon infrastructure, and there is substantial investor interest in nuclear as part of diversified energy portfolios. The question, as the World Nuclear Association has observed, is not whether the money is available, but why it is not flowing into nuclear faster.

Yet political support, technological innovation and market demand do not automatically create investable projects. Nuclear developments remain complex, capital-intensive undertakings with long development timelines, significant upfront costs and multiple stakeholders.

Adding to this complexity is a workforce challenge: decades of reduced nuclear construction activity in Western markets have eroded the skilled labour base and institutional knowledge needed to deliver nuclear projects. Engineers, welders, and project managers who built the last generation of plants have in many cases retired, and rebuilding this capability takes years. Projects in Finland, France, the United States and the United Kingdom have all experienced delays attributable in part to skills shortages and the loss of construction experience.

What gives investors confidence in a nuclear project?

One of the most important drivers of investment is certainty. Investors do not expect every risk to be removed, but for any project they do expect a clear understanding of the risks involved, who is responsible for managing them and how they will be addressed throughout the project lifecycle.

This means looking beyond technology: investors will assess the maturity of regulatory and licensing frameworks, the credibility of financing structures and the likelihood of a project progressing successfully from development through to operation.

There are initiatives to address the regulatory challenges - growing international cooperation on design certification and regulatory harmonisation (for example, through the International Atomic Energy Agency's (IAEA) Nuclear Harmonization and Standardization Initiative) may reduce timelines and costs for standardised reactor designs. For investors, this represents a potential pathway to more predictable licensing outcomes across multiple markets.

A technically viable project may still struggle to attract investment if there is uncertainty around approvals, delivery timelines or long-term commercial viability. Likewise, a strong technology proposition may fail to secure funding if the financial structure does not reflect the realities of the project.

Investor confidence is often driven just as much by delivery certainty. Olkiluoto 3 in Finland was completed 14 years late and several times over budget; Flamanville 3 in France experienced similar delays; and Vogtle Units 3 and 4 in the United States saw costs more than double from initial estimates. These experiences have created caution across the market, particularly where designs remain unproven at commercial scale. As a result, financing decisions are increasingly influenced by confidence that projects can be delivered on time and within budget, rather than by technology alone.

Certainty does not mean guaranteeing success, it means creating a framework in which investors can make informed decisions with a clear understanding of the opportunities and challenges ahead.

Why do risk allocation and project delivery matter as much as technology?

Much of today's nuclear discussion focuses on SMRs and advanced reactor technologies. While these innovations may offer new opportunities and different deployment models, they do not remove the need for careful project structuring.

Investors continue to ask the same fundamental questions:

  • Can the project be delivered?
  • Are the principal risks understood and manageable?
  • Does the commercial structure support long-term viability?

This is where risk allocation becomes critical. Construction risk, technology risk, regulatory risk and supply chain risk all need to be allocated to the parties best placed to manage them. Supply chain risk in particular warrants close attention: the number of manufacturers with the capability to produce nuclear-grade components (i.e. reactor pressure vessels, steam generators, and large forgings) remains limited, with lead times that can stretch to years and certification requirements that cannot be accelerated.

Transferring risk to contractors and delivery partners does not necessarily address the issue – a commercial transfer of risk does not mean that the recipient can realistically control or absorb it. Successful projects are often those that bring together financing, regulation, procurement and delivery planning from an early stage. Risk allocation is not simply a contractual issue; it is a central investment consideration that directly influences project bankability and delivery confidence.

One point that investors have consistently emphasised is the need for early transactions. "First-movers", both on the project side and the investment side, are essential to establishing the pricing benchmarks, underwriting standards and deal structures that will enable future delivery. Without these reference points, each project continues to be evaluated as if it were the first.

This is one reason why alternative financing models continue to attract attention across the sector. The United Kingdom's Regulated Asset Base (RAB) model, which allows regulated returns during construction, aims to reduce the cost of capital for projects like Sizewell C, which has notably attracted commercial banks and institutional investors from an early stage. Direct government equity participation, export credit agency financing, and sovereign guarantees each offer different approaches to de-risking investment. These mechanisms can help strengthen investor confidence, particularly for first-of-a-kind projects where technology risk compounds construction risk.

Why must financing be considered alongside project delivery?

Perhaps the most important lesson for stakeholders is that nuclear investment cannot be considered in isolation. Finance cannot be an afterthought; it must be integrated or provided for from the outset, developed in parallel with technical and regulatory readiness rather than addressed as a final step.

Financing is closely linked to regulatory approvals, licensing requirements, contracting structures, supply chain capability, liability arrangements and long-term operational obligations. Decisions made in one area can have significant implications elsewhere.

This integration requires both industries to bridge a communication gap that has developed over decades of limited interaction. Financial institutions approaching nuclear for the first time will be challenged by the need to distinguish between different categories of risk and assess the maturity of liability and insurance frameworks that have evolved over the last sixty years. Closing this gap - through early engagement, shared frameworks and accessible data - is essential to unlocking investment at scale.

Nuclear liability arrangements are a further consideration that shapes project insurability and investor appetite. Frameworks for channelling liability to operators and setting compensation limits exist under long-established international conventions, the adequacy of these limits, and the extent to which they are supplemented by state indemnities, can significantly influence project economics and the availability of commercial insurance.

Addressing these issues separately can create gaps, conflicting assumptions or risks that are identified too late. By contrast, projects that align legal, regulatory, commercial and technical planning from an early stage are generally better positioned to demonstrate investment readiness.

An integrated approach does not eliminate complexity, but it can make that complexity more visible, manageable and investable.

Can nuclear ambition be converted into investable projects?

Recent project completions offer instructive contrasts. The Barakah nuclear power plant in the UAE, the first civil nuclear programme in a newcomer country for nearly three decades, was delivered broadly on schedule through a turnkey contract with Korea Electric Power Corporation, backed by substantial government commitment and a partnership model that embedded knowledge transfer from the outset. Notably, construction times improved from unit to unit, demonstrating the series-build effect in practice. The project has since been refinanced, indicating a degree of investor confidence in operating nuclear assets. However, European and US projects that attempted to build "first-of-a-kind" designs faced significantly greater challenges. The lesson is not that one model is universally superior but rather the need for alignment between project structure, national capability and risk appetite.

Elsewhere, there are encouraging signs of momentum. Sweden's nuclear programme has reportedly moved quickly. In the United States, significant capital is flowing into the SMR sector from technology companies and industrial users seeking reliable clean power for data centres and manufacturing facilities. Poland, the Czech Republic, Romania and other markets have financing discussions actively underway. While challenges remain, these developments suggest that the direction of travel is real.

What can be learned from recent project experience?

As the nuclear sector enters a new phase of development, the central challenge is no longer whether nuclear energy has a role to play in future energy systems. In many jurisdictions, that question has already been answered.

The more pressing issue is whether projects are being structured in a way that attracts investment and supports successful delivery.

Technology will continue to evolve, policy ambition is likely to grow, and opportunities will emerge across established and developing nuclear markets. However, these factors alone will not determine success.

The projects most likely to succeed will be those supported by clear regulatory pathways, credible commercial structures and a realistic approach to managing risk. They will also recognise the connections between investment, licensing, contracting and project delivery at the earliest stages of development.

The future of nuclear may be shaped by innovation, but it will be delivered through investment confidence, coordinated planning and effective project execution. Without these foundations, nuclear ambitions will remain aspirational rather than operational - and the decarbonisation and energy security objectives that nuclear is expected to support will be harder to achieve.

Whether you are developing, investing in or supporting nuclear projects, our Nuclear team can help you navigate the legal, regulatory and commercial challenges that shape project success. To discuss any of the themes explored in this article, please contact Paul Green, Robert Armour and Dominic Richardson.