Trump Mobilises Private Capital. China Is the Capital. Von der Leyen Mobilises the Taxpayer.

US Private Capital Goes Critical

Start with July 24. Four American companies standing behind Trump after reaching criticality under the accelerated reactor program.

A year earlier, his administration had ordered the Department of Energy to accelerate advanced reactor testing. The target was at least three designs reaching criticality by July 4, 2026.

Four made it - Antares Nuclear, Valar Atomics, Deployable Energy and Aalo Atomics all reached zero-power criticality.

The companies participating in the programme were responsible for the costs of designing, manufacturing, constructing, operating and eventually decommissioning their reactors.

The government provided an accelerated authorisation pathway, technical infrastructure and access to national laboratory expertise.

Private money, private companies, government laboratories and a state that, for once, mainly concentrated on removing obstacles. An exotic concept.

China has solved the capital question more elegantly.

Its nuclear industry is dominated by giant state-owned companies such as CNNC, CGN, SPIC and Huaneng. The state provides the direction, the companies provide the industrial machinery, and China currently has dozens of reactors under construction.

In China, the capital is not private. It merely behaves as though somebody expects it to produce something - it builds, it scales, it is effective.

It just happens to belong to the state.

Europe Rediscovers Nuclear Power

Europe, meanwhile, has recently made an extraordinary scientific discovery - Nuclear power is useful.

In March, Ursula von der Leyen announced that Europe turning away from nuclear energy had been a “strategic mistake.”

Fortunately, the European Commission already had the obvious remedy - a guarantee.

Specifically, €200 million from the EU carbon market to guarantee investments in innovative nuclear technology and “stimulate” private investment, with small modular reactor technology expected to become operational in the early 2030s.

This is not even about €200 million. Brussels can lose that behind a sofa.

We have seen the machinery before.

• The EU puts in grants or guarantees. - NOT PRIVATE CAPITAL
• The EIB provides financing. - NOT PRIVATE CAPITAL
• National governments and other public institutions may add more. - NOT PRIVATE CAPITAL

Only after much of the early risk has been absorbed by public institutions does private capital become substantially more interested.

The EIB - European Investment Bank, incidentally, is not private capital. It is owned by the 27 EU member states and raises money on capital markets using the strength of an AAA-rated public institution. Calling an EIB loan private investment because the money originally came from bond buyers would be rather like calling government debt crowdfunding.

InvestEU makes the arrangement particularly elegant.

An EU budget guarantee increases the risk-bearing capacity of the EIB and other financial institutions, which then finance projects alongside other public and private investors. The eventual value of all those projects becomes “mobilised investment.”

So when Brussels says it wants to mobilise private capital, it does not necessarily mean finding investors willing to take the commercial risk themselves. It constructs enough public financing, guarantees and institutional protection around the project that private investors eventually agree to participate.

Europe’s most successful venture capitalist is the taxpayer.

Europe is not short of capital, scientists, engineers or companies.

It is astonishingly rich in all four.

What it appears to lack is the institutional ability to leave them alone long enough to produce something without first regulating and taxing it to death.