Rolls-Royce, the British aerospace and engineering giant, has won government backing to develop the UK’s first small modular nuclear reactors.

This marks a significant step in the country’s push toward sustainable energy.

The announcement, made on Tuesday, follows a rigorous two-year selection process and underscores the UK’s renewed commitment to nuclear power.

The government also confirmed a £14.2 billion ($19.2 billion) investment to construct the large-scale Sizewell C nuclear power station in eastern England, further bolstering the nation’s energy infrastructure.

UK Energy Secretary, Ed Miliband, highlighted the economic benefits of the SMR initiative, stating it will “create thousands of high-skilled jobs, drive regional economic growth, and enhance energy security.”

“We are ending the no-nuclear status quo as part of our Plan for Change and are entering a golden age of nuclear with the biggest building programme in a generation,” Miliband said.

The UK’s Labour government said that the initiative could create up to 3,000 jobs and supply power to around 3 million homes when the SMRs are integrated into the grid by the mid-2030s.

Rolls-Royce praised the move by Great British Energy – Nuclear, a state-owned entity, to construct three SMR units, with the FTSE 100 company calling it a “major milestone” for both its business and Rolls-Royce SMR.

“It is a vote of confidence in our unique nuclear capabilities, which will be recognised by governments around the world,” Rolls-Royce CEO Tufan Erginbilgic said in a statement.

“It is also evidence that the strategic choices we have made in the transformation of Rolls-Royce are delivering,” he added.

Shares of Rolls-Royce rose more than 2% following the announcement.

The UK government plans to sign a contract with Rolls-Royce SMR and allocate a site for its nuclear project later this year, pending regulatory approval.