Rolls-Royce offloads 20 percent stake in SMR business to Czech utility CEZ

Rolls-Royce has offloaded a 20 percent stake in its small modular reactor (SMR) business unit to Czech utility CEZ.

The deal is part of a broader strategic partnership between the two companies to deploy the budding technology. This follows an announcement last month that the Czech Republic had chosen Rolls-Royce as its preferred supplier for building SMRs in the country. The Czech government holds a 70 percent majority stake in CEZ.

Specific terms were not disclosed. However, it’s estimated that CEZ paid hundreds of millions of dollars for the stake in the unit.

Following the agreement, the two companies have revealed plans to deploy upwards of 3GW of electricity using the Rolls-Royce SMRs.

Rolls-Royce SMR told the Financial Times that the agreement with CEZ was a “key element” of its “overall funding and deployment strategy.” It said further steps could include “equity injections as well as funding from commercial contracts.”

Current investors in the company include BNF Resources, US-based utility Constellation, and the Qatar Investment Authority. These partners have collectively committed approximately £280 million ($362.8m) to date.

In September, the UK government selected Rolls-Royce as one of four companies advancing to the next phase of negotiations to secure support for domestic technology development.

In 2021, the UK government provided £195 million ($264m) to establish the business unit. Unlike other SMRs, most of which have a capacity of 300MW and below, Rolls-Royce’s reactor will have a capacity of 470MW.

interest in the SMR sector has seen a significant boom over recent months, with several large data center operators signing agreements with SMR companies within the US market.

Earlier this month, Amazon signed three agreements to facilitate the deployment of SMRs across its business operations. These included agreements with Energy Northwest and Dominion Energy and a direct investment in SMR firm X-energy.

A week earlier, Google announced a 500MW deal with SMR provider Kairos Power. The firm expects the first of the six to seven reactors under the agreement to come online in 2030.

In addition, Oracle founder Larry Ellison reported that his company plans to build a 1GW data center campus backed by three SMRs but has yet to provide further details.

This increasing support for SMRs across the data center sector has been buoyed further by governmental commitments, especially within the US market. Earlier this month, the US Department of Energy opened applications for $900 million in funding to support a domestic deployment of SMRs.

However, despite the increased interest, the majority of SMRs remain in the demonstration project phase and are unlikely to become a commercialized solution until the 2030s at the earliest.