Apollo Nears Funding Deal of Up to £5 Billion for EDF’s Hinkley

(Bloomberg) -- Apollo Global Management Inc. is nearing an agreement with Electricite de France SA to provide as much as £5 billion ($6.7 billion) of financing for the Hinkley Point C nuclear power plant in the UK.

While the alternative asset manager previously considered providing a complex mix of equity and debt, the latest talks are mostly focused on conventional long-term loans, people with knowledge of the matter said, asking not to be identified because the deliberations are private. 

The deal would give EDF access to a pool of private capital provided by Apollo, and reduce the utility’s need to tap the sterling-denominated corporate debt market.

Deliberations are ongoing, and there is no certainty that an agreement will be reached, the people said. The funding was reported earlier by the Financial Times.

Representatives for Apollo and EDF declined to comment.  

The potential Apollo funding ranges from £4 billion to £5 billion, the people said. It would provide EDF with some breathing space, as the estimated cost of building Hinkley Point C has soared to as much as £47.9 billion, due in part to lingering labor shortages, the Covid pandemic and supply chain issues. 

Under EDF’s base-case scenario, the first of the two reactors at the site is scheduled to become operational in 2030 — five years later than initially planned.

EDF’s bill for the project has increased after its partner China General Nuclear Power Corp. stopped funding its minority share of project at the end of 2023, having fulfilled its contractual commitment.

The French state-owned utility also faces huge funding requirements in its home market. EDF is boosting spending to prolong the life of its aging atomic power stations, while the French government has said it will provide cheap financing to help it build at least six new reactors. 

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