U.S. Energy Department Advances Nuclear-Powered Data Centers Potentially Enabling New Asset-Backed Securities
The U.S. Energy Department's initiative to fast-track nuclear reactor permits for data centers may create new asset-backed securities. This development could significantly reshape financing in the energy sector, particularly in nuclear investments.
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The U.S. Energy Department aims to expedite permitting for nuclear reactors at 16 identified government-owned sites to power data centers, with construction possibly starting by the end of this year and operations by 2028.
This initiative follows a 2025 executive order and allows the department to bypass conventional Nuclear Regulatory Commission processes. Companies like Oklo and TerraPower are actively engaging in this space, with agreements in place to supply reactors to Meta's facilities, potentially leading to additional reactors by 2035.
The trend is prompting discussions among financial institutions on securitizing cash flows from power-purchase agreements, marking a shift from traditional utility-fee securitizations. The growing interest in data-center securitizations shows a robust pipeline, having already reached $10.2 billion this year.
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