International Public Partnerships (INPP) Investor Update summary

Strategic investment overview

• Selected as preferred bidder for Sizewell C with a £250 million equity commitment over five years, targeting a 3% shareholding and investing £50 million annually.

• Investment structured under the RAB model to deliver attractive, regulated, inflation-linked returns, with a forecast IRR in the low teens, significantly above share buybacks.

• Funding sourced from ongoing divestments, aligning with a capital recycling strategy and maintaining a £200 million share buyback program.

• Sizewell C will represent about 10% of NAV by 2030, enhancing portfolio diversification and extending weighted average life by four years.

• The project is expected to support long-term dividend growth, extend covered dividends from 20 to 25 years, and deliver significant ESG benefits by powering 9.7 million homes with low-carbon energy by 2030.

Risk management and protections

• Investment is insulated from construction cost overruns and nuclear-specific risks through a robust government support package and Ofgem license arrangements.

• No exposure to power price volatility; returns are set by economic regulation and are CPIH-linked.

• Governance rights exceed the proportionate equity stake, including board representation, observer status, and negative control over reserved matters.

• Voting restrictions mitigate conflicts of interest where the government acts as both debt and equity provider.

• Liquidity facility under the Government Support Package mitigates refinancing risk.

Portfolio impact and financial outlook

• Sizewell C's adoption of the RAB model ensures predictable, inflation-linked cash flows and NAV accretion over time.

• Portfolio's weighted average discount rate rises by 30 basis points to 9.3%, and inflation linkage improves to 0.8% by 2030.

• Investment is accretive to both share buybacks and lower-returning divested assets.

• Cash yield begins from day one post-financial close, with significant yield increase expected after project completion.

• Project leverages proven design and supply chain experience from Hinkley Point C, reducing construction risk and cost uncertainty.