French energy firm EDF set for state takeover
The French government has revealed plans to fully nationalise troubled energy firm EDF – sending shares in the debt-laden power utility sharply higher.
Shares in the group, which were down five per cent before the announcement, rose as much as 9 per cent in the hours following the decision.
The decision was announced today by Prime Minister Elisabeth Borne during a policy speech in the lower house of parliament.
She said: “I can confirm to you today that the state intends to control 100 per cent of EDF’s capital.”
The state already owns 84 per cent of the company – which is suffering from multiple pressures including delays and budget over-runs on new nuclear plants in France and the UK, alongside corrosion problems in some of its ageing reactors.
Currently, half of its reactors in France are offline.
EDF was also hit by government rules forcing it to sell power to rivals at a discount while prices hit record high, in order to ease pressure on French energy users.
The company has estimated output losses will reduce profits by €18.5b, while the discounted power sales will cost the firm €10.2bn.
Its debt is forecast to rise 40 per cent this year to more than €61bn.
The option of fully nationalising EDF was first flagged by President Emmanuel Macron earlier this year, as he intends to make the company the main pillar of a massive investment in new French fleet of nuclear reactors.
Borne did not clarify if the nationalisation would be carried out via special legislation or through a buyout of minority shareholders.
EDF is a key contributor the UK’s pledged ramp up of nuclear power, managing the construction of Hinkley Point C and overseeing the proposed development of Sizewell C.