Rolls-Royce has held exploratory talks with advisers over financing options for its small nuclear business, including an initial public offering, amid growing investor excitement about the nascent technology.

The FTSE 100 engineer was in June selected to build Britain’s first fleet of small modular reactors as part of a plan by the Labour government to make the UK a world leader in the technology. The Rolls-Royce-led SMR consortium is in talks to finalise a contract with the government later this year.

The talks with investment houses and banks focused on future funding requirements of the business, according to two people familiar with the situation. “There is a live debate within the shareholder base,” said one of the people, noting that a listing at a high valuation would generate significant funding.