The construction of the Sizewell C nuclear power plant in Suffolk will cost around £38 billion, the Government has announced as it struck a deal with a group of investors.

Energy Secretary Ed Miliband has signed the final investment decision to give the development the green light, the Department for Energy Security & Net Zero (DESNZ) said.

The Government will become the biggest equity shareholder in the project with a 44.9% stake.

New Sizewell C investors include Canadian investment fund La Caisse with 20%, British Gas owner Centrica with 15%, and Amber Infrastructure with an initial 7.6%.

It comes alongside French energy giant EDF announcing earlier this month it was taking a 12.5% stake – lower than its previously stated 16.2% ownership.

The total investment, which is split between equity funding from investors and debt financing, exceeds the target construction cost of £38 billion, therefore acting as a buffer in case costs overrun.

The National Wealth Fund – the Government’s investment vehicle – is providing the majority of the debt finance with a loan of up to £36.6 billion.

The final deal clinches the investment needed to deliver the long-awaited nuclear plant since it was first earmarked for development in 2010.

It also confirms the cost of Sizewell C’s construction, which is nearly double a previous forecast of about £20 billion by developer EDF five years ago.

An average of £1 will be added to each household’s energy bills per month from autumn, over the duration of the construction phase.

Once Sizewell C is up and running, it is expected to create savings of up to £2 billion a year across the future low-carbon electricity system.(PA Graphics)

The Government did not confirm how much individual households are estimated to save from the cheaper clean electricity.

DESNZ said the cost is about 20% cheaper than the development of the Hinkley Point C nuclear power station in Somerset – which is under construction and projected to open in 2031.

Sizewell C will power the equivalent of six million homes and create some 10,000 jobs once it is operational, which is expected to be in the 2030s.

Mr Miliband said: “It is time to do big things and build big projects in this country again – and today we announce an investment that will provide clean, homegrown power to millions of homes for generations to come.

“This government is making the investment needed to deliver a new golden age of nuclear, so we can end delays and free us from the ravages of the global fossil fuel markets to bring bills down for good.”

Chancellor Rachel Reeves said the development would reduce the UK’s reliance on “foreign dictators” for energy.

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The main generator 1, at the Sizewell nuclear power plant in Suffolk (James Manning/PA)

“This is a public-private consortium. We as a Government are putting in money but that means that government – taxpayers – will get a return on that investment,” she said.

Ms Reeves added: “La Caisse, Centrica and Amber’s multibillion-pound investment is a powerful endorsement of the UK as the best place to do business and as a global hub for nuclear energy.

“Delivering next generation, publicly owned clean power is vital to our energy security and growth, which is why we backed Sizewell C.”

Nuclear plants are seen as increasingly important electricity sources as the Government tries to decarbonise Britain’s grid by 2030, replacing fossil fuels with green power.

However, the last time Britain completed one was in 1987, which was the Sizewell B plant.

Chris O’Shea, Centrica’s chief executive, said Sizewell C was a “compelling investment for our shareholders and the country as a whole”.

“This isn’t just an investment in a new power station – it’s an investment in Britain’s energy independence, our net zero journey, and thousands of high-quality jobs across the country,” he added.

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