Nuclear energy is back on Europe’s agenda, and this time, the political momentum is real. Facing volatile energy markets, mounting pressure to decarbonize and a renewed focus on energy independence, governments across the continent are reversing longstanding positions and turning to nuclear power as a strategic priority.
This shift in sentiment is playing out at speed due to the current geopolitical climate. Belgium, Switzerland and Italy have announced plans to reverse historic bans, while Finland and Sweden are pursuing an ambitious nuclear power strategy. The UK, meanwhile, is streamlining regulation to accelerate nuclear projects. What was, until recently, a politically toxic energy source is now being treated as essential infrastructure.
The current policy sea change is opening a significant investment runway. The European Commission’s (EC) 2026 Nuclear Illustrative Programme—also known as PINC—whose objective is “to provide an up-to-date, comprehensive, fact-based overview of nuclear development trends and a scope of the investment needs across the EU,” projects a need for US$280 billion in investments in large reactors by 2050 to deliver the bloc’s nuclear ambitions. PINC also specifies that the installed capacity of small modular reactors (SMRs) should range from 17 GWe to 53 GWe by 2050, corresponding to between 60 and 350 units depending on average unit sizes of 100 to 400 MW.
At the Nuclear Energy Summit in March, the EC also announced a €200 million (US$233 million) guarantee fund to support private sector investment in the development of SMRs.
Data and key transactions
M&A activity in Europe’s nuclear energy sector reached a seven-year high in 2025. According to Mergermarket, a total of 25 transactions were announced over the course of the year, up from 17 in 2024, with deal value coming in at US$1.5 billion (excluding the UK’s Sizewell C deal). Already, 2026 is looking similarly strong. Deal volume is following a comparable trajectory to 2025, with ten deals announced by June 8. But the market has recorded a remarkable spike in deal value, with those ten totaling US$3 billion, already doubling 2025’s full-year output and eclipsing all annual totals for the last several years.
Several key investments set the tone over the past year. These include the US$475 million merger between US-listed blank check company GSR III Acquisition Corp and nuclear startup Terra Innovatum, an Italy-based developer of micro-modular reactors (MMRs). The deal aims to support the rollout of the SOLO MMR, a clean energy solution for data centers, mini-grids, large-scale industrial operations and off-grid sites. Once the deal is completed, the nuclear startup will list on the Nasdaq stock exchange.
Another notable deal, outside the scope of Mergermarket’s M&A stats, involved the commitment of approximately £3.25 billion (US$4.4 billion) from the private sector in the UK government’s Sizewell C nuclear power plant, with equity investments from Canadian pension fund La Caisse, Centrica and Amber Infrastructure. The power plant is expected to create 10,000 direct jobs and power six million homes, according to the UK treasury.
Meanwhile, the Czech government acquired a majority stake in CEZ subsidiary Elektrarna Dukovany II, which plans to build two new nuclear units.
SMRs are proving popular with investors this year, given their many positive features, particularly their size and flexibility compared to conventional options, which make them less costly and time-consuming to build. Calogena, a subsidiary of French industrial firm Groupe Gorgé, is developing an SMR specifically for district heating networks and announced a fundraise of nearly US$116 million in March to accelerate development.
In another significant SMR deal, nuclear technology firm Studsvik acquired Swedish SMR project developer Kärnfull Next, bolstered by the country’s updated nuclear legislation. The acquisition will improve Studsvik’s offering across the nuclear lifecycle, including fuel and materials technology, software and waste management.
In the UK, the government has allocated £2.6 billion (US$3.5 billion) to run the UK’s SMR program and £599 million (US$803 million) to Rolls-Royce SMR to support the development of its small modular reactors, via the National Wealth Fund.
Deal drivers
Three forces are converging to drive dealmaking in Europe’s nuclear power sector: skyrocketing electricity demand from data centers, broad reassessment of energy security, and a regulatory environment that is shifting decisively in nuclear’s favor.
The data center boom being driven by AI is perhaps the most immediate catalyst. As the need for reliable, carbon-free power outstrips the intermittent nature of renewable sources, data center businesses are increasingly turning to nuclear as the only scalable, clean energy option to decarbonize their activities.
Europe’s quest for energy security is also driving interest. France, which derives roughly 70 percent of its electricity from nuclear power, is already the continent’s leader. Indeed, at the start of 2026, the French government confirmed that it would build six new EPR nuclear reactors as part of its new energy roadmap.
Perhaps the most striking development is the speed at which former skeptics are reversing course. Germany’s Chancellor Friedrich Merz, for instance, has called the country’s 2023 shutdown of its nuclear power plants a “huge mistake,” but has not announced plans to build new plants. However, Germany will not oppose other EU countries’ plans to develop nuclear, as it has in the past.
Elsewhere in Europe, Sweden recently committed to four large-scale reactors to meet surging demand and strengthen energy independence. Meanwhile, Italy is preparing to reintroduce nuclear into the country’s energy mix through next-generation small reactors developed by the private sector, a move set to reverse a four-decade ban on nuclear power. The government is expected to approve a framework for the return of nuclear this summer, in response to geopolitical instability and rising energy costs.
China and Russia are the only nations to have deployed SMRs operationally, but the EU and UK have committed to accelerating development. This support is already drawing capital: SMR unicorn newcleo recently closed an US$87 million funding round to expand its R&D infrastructure in Europe and enter the US market. At the end of May, the company confirmed it would list on the Nasdaq via a SPAC, with the merger valued at US$2.4 billion.
PE and infrastructure investors are taking notice. Innovative startups focused on fusion energy, next-generation fission reactors and nuclear waste management solutions are piquing investor interest at a time when the technology curve and policy environment are moving in the same direction.
Divided opinions and regulatory fragmentation
For all the political tailwinds, dealmakers in Europe’s nuclear power sector face several inherent challenges.
Political consensus remains fragile. The countries that are now supporting nuclear power can reverse course with the next election cycle. Germany’s pivot, while a promising development for other EU countries, is quite recent and may change at the next elections. Italy’s Prime Minister Giorgia Meloni has faced domestic opposition to her nuclear plans, with critics arguing that SMRs will generate additional waste and carry higher costs than renewable alternatives.
Regulatory fragmentation, as well as under-resourced and inexperienced regulators, compound the problem for countries that do not have nuclear programs yet. These projects require large, upfront capital commitments and long, stable policy timelines. Yet the politically sensitive nature of the industry has resulted in uneven regulation, having changed over the years in response to political agendas and public opinion. As such, dealmakers face a complex and uncertain regulatory environment.
Supply chain risk may be one of the sector’s most underappreciated obstacles. Nuclear energy production is globally interconnected, and this poses a challenge given current geopolitical tensions and the rise of resource nationalism. Europe remains dependent on imported uranium, and Russia currently supplies around 20 percent of Europe’s enriched uranium. While the industry is ripe for investment, a disbanded and disrupted supply chain could delay projects, inflate costs and ultimately deter capital.
Outlook
The case for European nuclear power M&A and equity investment is as strong as it has been in a generation. Energy security in Europe is no longer a peripheral concern. Decarbonization mandates are tightening. And the surge in AI-driven power demand, particularly from data centers, is creating a supply gap that renewables alone cannot address.
While dealmaking is still in its early stages, the vast quantity of capital needed will encourage investors to pursue deals. PE players and early-stage investors are already looking to snap up lucrative startups with disruptive potential. And buoyed by an increasingly favorable political and regulatory climate, many positive factors are aligning for ambitious dealmakers.