About us

How we are funded

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The fund received an initial endowment of £260m. Further cash injections have been provided by the UK government to ensure the sufficiency of the fund and EDF Energy is required to make ongoing contributions

Establishment of the fund

The fund was established in 1996 with an initial endowment of £260m and the intent that future contributions from British Energy (the newly privatised operator of the most modern UK nuclear power stations) and growth of the fund through its investment returns would be sufficient to meet the costs of decommissioning the power stations. British Energy was responsible for meeting any shortfall in the fund as well as paying for the costs of removal and storage of spent fuel (which were not within the scope of the fund).

Following British Energy's financial difficulties and subsequent restructuring in 2005, the UK government assumed responsibility for British Energy's nuclear liabilities. As part of these new liabilities arrangements, NLF assumed responsibility for meeting the cost of certain fuel-related liabilities and the government undertook to meet the costs of discharging NLF's responsibilities in the event of any shortfall in the fund.

NLF received further cash injections from the sale of shares in British Energy that NLF was entitled to under the restructuring arrangements.

Government funding

In 2020, NLF entered into a new Funding Agreement with the Secretary of State for Business, Energy and Industrial Strategy (BEIS) and HM Treasury with the purpose of ensuring that the fund's assets will be sufficient to meet the costs of discharging relevant nuclear liabilities. In accordance with this agreement, NLF undertakes an annual funding review (AFR) of estimated sufficiency according to a prescribed process. If the AFR predicts an insufficiency in the fund's assets greater than £300m, BEIS and HM Treasury have the option to make an additional contribution to the fund, to be held in the National Loans Fund. If this option is not taken, NLF is able to transfer funds from its National Loans Fund account to its Mixed Asset Portfolio in order to generate higher investment returns. Government continues to meet the costs of discharging relevant nuclear liabilities to the extent that there are insufficient assets in the fund.

Further details of payments to and income received by NLF are set out in our annual report and accounts and in our history timeline.

Nuclear operator funding

Under a Contribution Agreement between NLF, BEIS and EDF Energy, EDF Energy make pre-agreed payments to the NLF on an annual and quarterly basis and, in addition, when fuel is loaded at SZB.

Investment returns

Funds received by NLF are invested in a diverse range of assets. You can read more about our investment strategy in the How we invest section of our website.

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About us
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History

The evolution of NLF from 1996 to 2022

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How we invest
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Our investments

The fund value is approximately £20.4bn at March 2022

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How we invest
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Investment principles

The National Loans Fund is used to meet the current and shorter-term liabilities of the fund and allows the Trustees greater freedom in investing the MAP.

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Annual reports

Download our annual reports below

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