Financing the nuclear renaissance: New models for a new era

By Mike Granowski and Balazs Kolbenheyer

The United States has set an extraordinary ambition: reach 400 gigawatts of nuclear capacity by 2050 — a roughly 100-fold increase over current addition rates. A May 2025 executive order reinforces this target, with a goal of bringing ten large reactors under construction by 2030 alone. The scale is unprecedented. So is the financing challenge that comes with it. For utilities, developers, and investors, the question is not simply whether nuclear can be built, but how it can be financed in a way that is both commercially viable and strategically resilient.

The scale of the nuclear financing challenge

Building nuclear assets — whether large conventional plants or next-generation small modular reactors (SMRs) — demands massive upfront capital, often committed for a decade or more before the first electron flows to the grid. For utilities, this creates a structural strain: debt accumulates on the balance sheet during construction, depressing key credit metrics long before any revenue materializes. First-of-a-kind (FOAK) technologies amplify these pressures further, introducing additional uncertainty around cost, schedule, and regulatory approvals.

Cost overruns, meanwhile, are not a theoretical concern; they are a well-documented reality across long-lead capital projects. Analysis of major U.S. transmission infrastructure projects reveals weighted average overruns of around 55%, with some projects exceeding their original budgets by multiples. Nuclear development, with its longer timelines and greater technological complexity, faces comparable if not greater exposure to these dynamics. Managing this risk is as much a financial design challenge as an engineering one.

The BOT model: A proven structure ready for nuclear

The build-own-transfer (BOT) model offers a compelling response. With a track record spanning public infrastructure, renewable energy , and utility transmission assets, the BOT structure has demonstrated its ability to de-risk capital-intensive development by separating the construction phase from utility ownership. In a BOT arrangement, a third-party developer builds and finances the asset independently; the utility only takes ownership once construction is complete and operations begin.

This model is fundamentally about risk reallocation. By removing construction-phase assets from the utility's balance sheet, BOT structures help preserve credit ratings and financial flexibility. The developer assumes construction and technology risk, and is compensated through a risk-adjusted return, which may include back-end economic participation in the operational asset. Designing these incentives correctly is essential: the developer must be motivated to control costs and deliver on schedule, not simply to transfer risk at the first opportunity.

Structuring deals that work for all parties

The financial mechanics of a viable BOT arrangement go well beyond the basic model. Retaining a portion of equity, for instance, can significantly expand a developer's capacity to absorb cost overruns without eroding returns, a critical consideration for FOAK nuclear projects where budget certainty is inherently limited. Precedent transactions in the utility sector demonstrate how third-party equity participation can enable more efficient capital deployment, with several major deals already establishing a benchmark for pricing and structure.

Legal terms and conditions are equally foundational. Across the full lifecycle of a BOT project — from site access and regulatory approvals through financing, construction, transfer, and post-operational economics — each clause shapes the project's bankability and commercial attractiveness. Getting these terms right is not a legal formality; it is a strategic imperative for any party seeking to enter the nuclear development market with confidence.

For utilities , developers, investors, and policymakers working at the frontier of the energy transition, the central question is no longer whether innovative financing structures are needed for nuclear development — it is which structures, partnerships, and terms will unlock capital at the required scale and speed. The full analysis offers frameworks and precedents to guide decision-makers navigating one of the most consequential infrastructure investment challenges of our time.

Enabling nuclear development at scale

Roland Berger supports utilities, developers, investors, and policymakers in scaling nuclear development through integrated strategy, financing, and execution expertise. We help define clear nuclear roadmaps and capital deployment strategies for large-scale and FOAK projects, while designing innovative financing structures that optimize risk allocation, preserve balance sheets, and mobilize third-party investment.

Our teams support end-to-end transaction execution, including structuring, partner selection, and commercial negotiations to ensure bankability. We also help mitigate cost overruns and technology risks through proven benchmarks and incentive design, while navigating regulatory requirements and aligning key stakeholders to accelerate project delivery. From initial concept through construction and transfer, Roland Berger combines strategic insight and financial engineering to help clients unlock capital and deliver nuclear projects efficiently at scale.