Pensions funds and other institutional investors could be brought in to help fund the proposed Sizewell C nuclear plant in Suffolk, according to the new boss of EDF Energy.

Chief executive Simone Rossi said innovative financing models could reduce the cost of the project and should be explored by the government.

Rossi was speaking at an event in Somerset near the Hinkley Point C construction site.

“Today there are almost 3,000 people on the site and there will soon be more than 5,000 working there, on a project that is on track for its next big milestones,” he remarked

“We’ve moved more than four million cubic metres of earth – that’s like digging a hole two and a half times as big as the Millennium stadium [Principality Stadium] in Cardiff. We are already installing the huge sea water cooling pipes.

“Soon the boring machines will arrive for the 11 kilometres of tunnels which will be dug under the Bristol Channel.”

He said the next major milestone is coming in June 2019 when building will begin on the above ground structures for the power station.

Hinkley Point C is expected to cost £19.6 billion to build, if it is completed according to the current schedule in 2025, or £20.3 billion, if it is delayed until 2027 as parent company EDF has suggested could happen.

The project has placed a strain on EDF’s finances. In March last year, the group sold €4 billion of new shares to help finance construction, most of which were bought by its majority shareholder – the French state.

Confirming earlier reports, Rossi said replicating its design for Sizewell C could bring down construction costs by a fifth.

He cited the example of the eight emergency generators which will be installed at Hinkley: “They had to be designed and certified to meet the standards required for nuclear safety. That means the first two will cost £38 million, but the next six will be half the price – £19 million each.

“At Sizewell, none of that development or certification work needs to be done again. All its emergency generators will be at the lower price.

“Repeating that experience countless times for a power station at Sizewell that is largely identical to Hinkley Point C makes a capital cost reduction of 20 per cent possible.”

He said Sizewell will benefit from reduced grid connection costs as the site was built with a connection capable of handling a bigger power station than is currently there.

Rossi said innovative financing models could also bring down the cost of capital: “At Hinkley Point C the shareholders bear all the risk of building the power station. The National Audit Office says that other models of financing should be considered for the future.  It believes this could significantly reduce overall cost of the project to consumers.

“With government, we should explore alternative financing models that can create the conditions where institutional investors like pension funds can participate when they were not able to before.”

Speaking separately to reporters, Rossi told Utility Week Sizewell will pose “significantly lower risk” to investors than Hinkley due its proven design.

Like Hinkley, the plant will be powered by two of the EPR reactors developed by EDF and its subsidiary Areva NP. The first four reactors to be built are nearing completion in China, France and Finland, although all have been beset by delays.

Rossi claimed initial scouting had found a “strong appetite” among institutional investors to participate in projects like Sizewell: “Clearly these assets, once they are built and running, really fit very well with the investment strategies and the profiles of some of these players.”

On the other hand, he said EDF would be unable to bring in outside investment if the constructions risks remained solely with shareholders: “The cost of financing is a function of the risks and it will be very difficult to lower these costs without changing the risk profile.”

When asked how much of the project might be financed in this way, Rossi said it is “too early to tell… We are trying to determine what’s feasible and once we know we will probably have a better idea”. He urged the government to work with them to explore the possibility, adding: “It will require some resources and effort on both parts”.

Rossi replaced Vincent de Rivaz as the chief executive of EDF Energy at the beginning of November.