Canadian uranium miner Cameco's shares soared as much as 24% on Tuesday after the company and its partner Brookfield Asset Management announced a binding term sheet with the US Department of Commerce to accelerate the deployment of Westinghouse Electric Company’s nuclear reactor technologies.

The agreement aims to mobilise at least $80-billion in investment for new Westinghouse reactors to be built domestically. The plan also includes near-term financing for long-lead items, with the reactors expected to provide reliable, low-carbon power for the American grid – including data centre and AI-related energy demand.

“We are pleased to see the US government make this commitment to expanding nuclear power capacity using Westinghouse's proven technology,” said Cameco CEO Tim Gitzel. “We expect that our highly successful partnership with Brookfield as owners of Westinghouse will be further strengthened through this strategic collaboration with the US government.”

Under the proposed structure, the US government will arrange financing and facilitate permitting for the projects, while being granted a participation interest in Westinghouse. Once vested, that stake would entitle it to 20% of any cash distributions exceeding $17.5-billion. The interest would vest once the government makes a final investment decision and commits to the full $80-billion construction programme.

If the participation interest vests by January 2029 and Westinghouse pursues an initial public offering (IPO) valued at $30-billion or more, the US government would have the right to trigger the IPO and convert its interest into a five-year warrant to purchase equity equivalent to 20% of the IPO entity’s value, after deducting the $17.5-billion threshold.

Gitzel said the US government’s participation “creates the right incentives to deploy its full suite of tools behind the construction of Westinghouse reactors, including financial, regulatory, policy and diplomatic support".

“That support is expected to drive additional value for the partnership and the many stakeholders who are expected to benefit from enhanced energy, national and climate security around the world.”

The initiative is expected to catalyse new growth across Westinghouse’s energy systems, fuel fabrication, and reactor services businesses, leveraging industrial supply chains developed during the Vogtle 3 and 4 builds.

Cameco, one of the world’s largest suppliers of uranium and nuclear fuel services, said the partnership positioned it to capture “tremendous upside” from accelerating global demand for nuclear fuel.

Brookfield and Cameco jointly acquired Westinghouse in November 2023, combining Brookfield’s infrastructure and energy investment expertise with Cameco’s deep roots in the nuclear fuel cycle.

Negotiations on definitive agreements are expected to follow, with the term sheet remaining effective if final terms are not reached. The transactions remain subject to regulatory approvals and customary closing conditions.