Market Access and Financing for Nuclear Power Projects will play a critical role in achieving India’s target of 100 GWe of nuclear power capacity by 2047. Nuclear plants require significant investment. They also operate over several decades. Therefore, developers need predictable revenues and access to affordable long-term capital.
However, industry stakeholders believe that current market and financing frameworks create unnecessary risks. Consequently, they are calling for reforms that can improve project bankability and attract greater private investment.
Must-Run Status and New Buyers Can Strengthen Revenue Security
Revenue certainty remains one of the most important requirements for nuclear project financing. At present, load dispatch centres can reduce generation from power plants under certain conditions. As a result, developers may lose revenue even when a nuclear plant remains available to generate electricity.
To address this concern, stakeholders recommend granting nuclear power plants explicit must-run status through the Model Power Purchase Agreement. Under this framework, dispatch centres would continue to schedule nuclear generation except during grid emergencies or AERB-directed shutdowns.
In addition, developers should receive deemed-generation compensation for non-emergency curtailment. This mechanism would protect revenues and improve investor confidence. Stakeholders also want to expand the pool of potential buyers for nuclear power. Currently, distribution utilities remain the primary off-takers. However, financial stress in some utilities increases counterparty risk.
Therefore, stakeholders recommend allowing private nuclear projects to sell power directly to captive consumers, group-captive users, data centre operators, open-access industrial customers, and highly rated corporate buyers.
Furthermore, policymakers should recognise these agreements as eligible power purchase contracts for financing and infrastructure purposes. Such reforms can diversify revenue sources and reduce dependence on a single category of buyer.
Infrastructure Status and Lending Support Can Unlock Capital for Nuclear Power Projects
Access to affordable finance remains another major challenge for nuclear projects. Unlike other infrastructure sectors, nuclear power does not currently enjoy the same level of access to long-tenor financing mechanisms. Consequently, developers face higher financing costs. To overcome this barrier, stakeholders recommend classifying nuclear power generation as a sub-sector under the Ministry of Finance’s Harmonised Master List of Infrastructure Sub-Sectors.
This step can unlock access to:
- Long-term borrowing options
- Credit enhancement mechanisms
- Infrastructure investment vehicles
- Tax-efficient financing instruments
- Infrastructure bonds
In addition, stakeholders support priority-sector lending status for private nuclear projects. They argue that nuclear energy contributes to clean energy goals, energy security, and economic development. Therefore, banks should be encouraged to support the sector through dedicated lending frameworks. Industry experts believe these reforms can significantly improve project bankability. Moreover, they can attract domestic and international capital into the sector.
Market Access and Financing for Nuclear Power Projects
| Recommendation Area | Concern | Expectation |
|---|---|---|
| Must-Run Baseload Status & Curtailment Compensation | Load dispatch centres may back down nuclear power plants for merit-order reasons beyond the developer’s control. This can reduce revenues and undermine recovery of fixed costs. | Grant nuclear power plants explicit must-run status under the Model PPA, except during grid emergencies or AERB-directed shutdowns. Provide deemed-generation compensation for any non-emergency curtailment based on the normative availability factor. |
| Captive, Data Centre & Behind-the-Meter Off-Take | Dependence on distribution utilities as the primary off-taker increases counterparty risk. Current regulations also provide limited clarity on direct nuclear power sales to large industrial and digital consumers. | Allow private nuclear projects to contract directly with captive consumers, group-captive users, data centre operators, and open-access industrial buyers rated AA- and above. Recognise these agreements as eligible PPAs for financing and infrastructure purposes. |
| Infrastructure-Sector Classification | Nuclear projects do not currently enjoy the same access to concessional and long-tenor financing available to other infrastructure sectors. | Include nuclear power generation in the Ministry of Finance’s Harmonised Master List of Infrastructure Sub-Sectors. This can unlock long-term borrowing, credit enhancement support, infrastructure investment vehicles, tax-efficient financing, and infrastructure bonds. |
| Priority Sector Lending Status | Nuclear projects have limited access to domestic bank lending for long-term investments because they do not qualify under Priority Sector Lending norms. | Recommend that the Reserve Bank of India classify lending to private nuclear power projects under Priority Sector Lending, similar to other clean-energy infrastructure sectors. |
| Expected Outcome | Limited buyer options and restricted financing channels increase investment risk and financing costs. | Expand market access, diversify off-take opportunities, improve access to long-term capital, strengthen project bankability, and accelerate progress towards India’s 100 GWe nuclear power target by 2047. |
Overall, stronger market access and better financing support can reduce investment risk, lower project costs, and accelerate nuclear power deployment. Most importantly, these measures can help India move closer to its goal of achieving 100 GWe of nuclear power capacity by 2047.
