France will be pursuing a full nationalisation of EDF to aid the state-owned energy giant to overcome a financial crisis that is linked to increasing debt, falling revenue , and an energy price cap the French premier announced yesterday.
It’s not known what the implications of this move are to Britain’s energy security in the future as EDF plans to construct an nuclear power plant with two reactors in Sizewell located in Suffolk.
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Introducing the legislative plan of her government in it’s time for French National Assembly, Elisabeth Borne said the state would acquire 100% stake in the company that is currently building two new reactors in Hinkley Point in Somerset. The current state stake is 83.88 percent.
She positioned the decision within the context of Macron’s efforts to ensure that France is able to satisfy its own energy needs and suggested that the stakes were high in 1946 the year that EDF was formed in the midst of a struggle to rebuild itself after its liberation from the Nazi occupation.
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It’s not certain what the implications of nationalisation are to the EDF’s British projects and its assets. EDF is the major owner of Britain’s nuclear power stations, and runs an energy supply company in the UK with a population of 3 million household customers.
In addition to building Hinkley Point C. EDF is currently in talks with the government on a funding agreement for the construction of a PS20 billion station in Sizewell.
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EDF will hold 20% part in Sizewell and is hoping to get UK government consent to let the taxpayer take another 20 percent stake next month.
The French government has not said whether it intends to make an offer to purchase the 16 percent stake in EDF which the state does not currently own, or adopt legislation that will make shareholders sell their shares.
Officials believe that the complete nationalisation of the country will allow EDF in securing funding for the six new reactors which President Macron has promised to construct with an estimated cost of EUR46 billion. The country has already 56 reactors, which provide 70.6 percent of its electric power.
The plan is accompanied by Borne saying that France will become the first major power in the world to eliminate the use of fossil fuels in its entirety. However, analysts believe that the decision to remove EDF from the market was made by the government due to the financial crisis that has afflicted the company.
EDF was in credit of EUR44 billion in 2021 that experts at Citi The investment banking institution believe could reach EUR65 billion at the end of this year. The group’s work council was noting “EDF might not get through to the end of the year” and the government was pressured to take action.
