PRAGUE – Czech power company CEZ signed an agreement with Britain’s Rolls-Royce SMR on Tuesday to form a strategic partnership to develop and deploy small modular nuclear reactors.

Under the terms of the agreement, CEZ will acquire a 20% stake in Rolls-Royce SMR, for which it will pay several billion Czech crowns (hundreds of millions of dollars).

CEZ plans to build the first small modular reactor at the existing Temelin nuclear power plant in the first half of the 2030s.

The partnership is expected to result in the installation of energy sources of up to 3 GW in the Czech Republic. CEZ will also participate in other Rolls-Royce SMR projects in Europe and around the world.

The Czech state has a stake of almost 70% in the company.

“This is an important moment to ensure the energy security of the Czech Republic,” said Czech Prime Minister Petr Fiala.

A power plant using a small modular reactor from the British company is expected to produce 470 MW for 60 years, CEZ said in a statement.

Small modular reactors are a type of nuclear reactor that can generate up to about one-third the power of a traditional reactor. Developers say small reactors will be built faster and more cheaply than large power reactors, tailoring to the needs of a particular location.

The Czech Republic relies on six nuclear reactors to produce more than a third of its electricity and plans to rely on nuclear power and renewable resources after deciding to phase out coal for power generation by 2033 to reduce carbon emissions.

CEZ should sign a contract by March with the South Korean KHNP build at least two nuclear reactors in Czechia.