France wants to renationalise 100% of the electricity company EDF, Prime Minister Elisabeth Borne announced on Wednesday in her general policy speech.
“I confirm to you today the intention of the State to hold 100% of the capital of EDF. This development will enable EDF to strengthen its capacity to carry out ambitious and essential projects for our energy future as soon as possible,” she declared before the National Assembly.
The French State now owns nearly 84% of the electricity supplier, 1% being held by employees and 15% by institutional and individual shareholders.
The group, already heavily indebted, is facing heavy financial burdens, and is also being challenged by the French government to launch a new nuclear reactor program.
“The energy transition goes through nuclear,” said Ms. Borne on Wednesday, taking up the position adopted this winter by President Emmanuel Macron.
The action of EDF (Electricité de France) jumped on the Paris Stock Exchange on Wednesday after the announcement of Ms. Borne.
The title took 5.56% to 8.28 euros around 3:45 p.m. (9:45 a.m. in Quebec), in a market up 1.86%. Before the speech, the price was down sharply, by 5%.
EDF has accumulated bad news since the beginning of the year. The group had to be recapitalized in April and its profit will plunge this year, largely because the French state has asked it to sell more electricity at low prices – a file on which the CEO opposes publicly to the government.
The group must also solve a pipe corrosion problem which forced it to shut down 12 of its 56 reactors. In total, more than half of the reactors in France are now shut down for maintenance.
In France, EPR technology remains at the heart of the energy strategy. Emmanuel Macron, re-elected in April for a second term, announced his intention to relaunch a nuclear program with six new generation EPR2 reactors, praising in particular the advantage for the environment of the electricity thus produced.
This long-term project will not succeed during this five-year period. The first commissioning is not expected before 2035 or 2037. But the financial stakes are immediate and considerable, with an estimated cost of more than 50 billion euros for six reactors.