Bankers Thinking Twice about Funding the Nuclear Surge

 Oil Price published an interesting and important news report on April 14 regarding how bankers were not willing to fund the nuclear surge world over, especially the target to triple nuclear power by 2050. It appears that bankers view the sector with considerable pessimism owing to its project risks. The Vice-President of the European Investment Bank is reported to have stated that heavy state involvement is required to make projects bankable.

So what are the implications of these from a legal point of view? How could India create a legal environment for addressing these problems? If and when India opens up the nuclear sector for private players, especially for Small and Modular Reactors, the following aspects could be thought about:

• Permitting unincorporated joint ventures to build, transfer and operate nuclear power plants, similar to petroleum exploration and production, which is also a high risk venture.
• Use of standard forms such as FIDIC and other similar forms, which will take a balanced approach.
• Effective dispute resolution through conciliation, Dispute Adjudication/ Avoidance Boards, and arbitration.  
• Designing effective insurance policies to cater to risks, etc.

All these require development of expertise in India and it is important for law universities and government institutions to play a crucial role in the next decade in developing that expertise.