Sweden’s renewed nuclear ambitions are shifting from policy to project finance as Videberg Kraft, the company tasked with developing new reactors on the Värö Peninsula, formally applies for state aid under a framework adopted earlier this year.
The application, submitted to the Swedish government by Videberg Kraft chief executive Desirée Comstedt, is structured under the Financing and Risk Sharing in New Nuclear Power bill approved by the Riksdag in May 2025. The framework allows state participation in financing and risk mitigation for companies willing to invest in new reactors, a notable shift for a country that spent much of the past decade scaling back its nuclear footprint. For policymakers, the question is not whether nuclear can deliver low-carbon baseload, but whether private investors can be persuaded to commit without public guarantees.
Ownership structure is already evolving to reflect that balance. Industrikraft, a consortium of nine industrial companies, has agreed to acquire a 20 percent stake in Videberg Kraft from Vattenfall, pending approval by the Swedish Inspectorate for Strategic Products. The transaction is expected to close in January 2026. The entry of energy-intensive industrial players signals a growing appetite for long-term power supply security, particularly as electrification accelerates across steel, chemicals, and manufacturing.
Under the government’s financing model, Videberg Kraft’s mandate is narrowly defined. The company will develop and own the reactors, separating project risk from broader generation portfolios. Once the government processes the application, negotiations will begin on the precise conditions attached to state support. If an agreement is reached, Sweden would then initiate a formal state aid notification to the European Commission. That step is critical, as EU competition rules remain a key constraint on national nuclear strategies.
Recent precedent suggests approval is possible but not automatic. The European Commission has already cleared Poland’s state-backed financing model for its first commercial nuclear power plant, judging it compatible with EU state aid rules. Sweden’s case will be closely watched, particularly by countries exploring small modular reactors as a way to control costs and deployment timelines while preserving firm capacity.
Videberg Kraft’s current planning centers on two competing technology pathways. One option involves deploying five BWRX-300 small modular reactors from GE Vernova Hitachi. The alternative is a three-unit configuration based on Rolls-Royce SMR technology. Both designs would deliver roughly 1,500 MW of total capacity, placing the Värö project firmly in the category of large-scale generation despite the use of modular reactors. A final supplier decision is expected in 2026 following an ongoing evaluation process.
The choice of technology will have implications beyond engineering. SMRs are often promoted as cheaper and faster to deploy than traditional gigawatt-scale reactors, but cost data remains limited, particularly in Europe. Investors and governments alike are seeking evidence that modular designs can deliver predictable construction schedules and manageable financing profiles. The Swedish risk-sharing framework implicitly acknowledges that uncertainty by shifting part of the financial exposure to the state.
For Vattenfall, the project aligns with a broader reassessment of nuclear’s role in the Nordic energy mix. While wind and solar capacity continue to expand, electrification of transport, industry, and heating is pushing peak demand higher and increasing the value of dispatchable low-carbon power. Nuclear offers that stability, but only if financing structures reflect the realities of long asset lifetimes and high upfront costs.
Industrial participation through Industrikraft adds another layer to the equation. By taking equity stakes, large electricity consumers are effectively hedging future power prices and signaling willingness to co-invest in generation assets. That model mirrors developments in other European markets, where industrial offtake agreements and ownership participation are increasingly used to underpin capital-intensive clean energy projects.
The state aid application also highlights a broader shift in European energy policy. As gas price volatility, grid constraints, and climate targets converge, governments are reconsidering the balance between market exposure and public intervention. Sweden’s framework does not guarantee construction, but it does establish a pathway for projects that would likely struggle to reach financial close under purely merchant conditions.
If approved, Videberg Kraft’s project would mark one of the most concrete steps toward new nuclear capacity in Sweden in decades. It would also serve as a test case for whether public-private risk-sharing can translate political support for nuclear into bankable projects. For an energy system facing rising demand and narrowing decarbonization timelines, the outcome will resonate well beyond the Värö Peninsula.
