Due diligence : European SMR technical, strategic and financial due diligence

Small Modular Reactor (SMR) companies are increasingly developing the Power-as-a-Service model, which allows customers—such as industrial users or communities—to access clean, reliable nuclear power without having to own or operate the SMR directly. This model, however, places significant financial risk on SMR vendors.

Industrial stakeholders are increasingly interested in supporting vendors early in their development phase to share some of this risk and ensure a steady supply of heat or electricity (or sometimes both, depending on the SMR technology). By participating in initial investments, these partners can benefit in various ways—such as prioritised access to energy once the reactor is operational, reserving a specific number of reactors aligned with their future energy needs, or securing supply at fixed or reduced prices, helping mitigate exposure to volatile energy costs for their end customers.

These partnerships are mutually beneficial: SMR vendors gain essential capital to advance their projects, while industrials and electricity providers secure future power supply and reduce long-term risk.

However, these deals require thorough evaluation. Risks must be mitigated, contracts must be carefully analysed, and the vendor’s technological readiness and delivery capacity must be accurately assessed.

To support such decision-making, Damona, in collaboration with its partner Nuclear-21, conducted a strategic, financial, and technical analysis of a European SMR vendor on behalf of a utility company. Agreements of this kind carry significant responsibilities on both sides, and expert guidance is crucial—especially when the partnership involves large, multi-year investments and the long lead times inherent in developing innovative SMR technologies. In a nutshell, to inform parties involved whether the vendor and the company are the right partners. De-risking the future of both parties.

Date: 2d May 2025