France plans nuclear re-boot

The French government this week outlined its plans to take full control of troubled utility player EDF in a bid to reinvigorate its nuclear power programme.

The state’s complete takeover of EDF “will give EDF the means to implement the new nuclear power plant programme the president has asked for and the roll out of renewable energy in France”, Finance Minister Bruno Le Maire said.

Earlier this year, President Macron called for a “renaissance” of the country’s nuclear industry, saying he wanted up to 14 new reactors to power the country’s transition away from fossil fuels.

He also announced that he would seek to extend the lives of all existing French nuclear plants where it was safe to do so.

Currently over half of France’s 56 nuclear reactors are idle, either for maintenance or corrosion problems linked to ageing.

The offer to minority shareholders will be priced at 12 euros per share, meaning the operation to fully nationalise the group will cost EUR9.7 billion  ($9.9 billion), the finance ministry said.

The electricity provider is currently 84% owned by the state, with institutional and retail investors holding 15% and staff 1%.

EDF’s finances have been weighed down by declining output from France’s ageing nuclear stations, which it manages, and the state-imposed policy to sell energy at below cost to consumers in an effort to help them pay their energy bills.

President Emmanuel Macron’s government plans to launch the buyout in September, which gives it time to set aside funds for the cost in a mini-budget in the autumn.

The finance ministry gave end-October as a likely date for completion.

The supplementary budget will, however, be subject to approval by parliament, where Macron’s party and its allies lost their majority in parliamentary elections last month.

Nuclear energy currently covers some 70 percent of France’s electricity needs. Nuclear was recently given a “sustainable” finance label by the European Union with the backing of France.

Once the operation is completed, EDF will be de-listed from the stock exchange, 17 years after its initial listing.