Thursday, May 19, 2022

The French government has promised to stand by EDF – Finance Minister Le Maire

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PARIS () – The French government has pledged to stand by the EDF and support the company when it faces difficulties due to its policy of limiting rising energy prices for consumers, the French finance minister said on Wednesday.

FILE PHOTO: A flag with the logo of the company Electricite de France (EDF) and the French flag near the EDF power plant in Buchain, near Valenciennes, France, September 29, 2021. / Pascal Rossignol / File Photo

Bruno Le Maire’s comments prompted the state-owned company’s CEO to openly criticize the government a week after President Emmanuel Macron’s government ordered a company fighting for re-election three months later to sell cheaper nuclear energy to competitors.

“If prices are lower and less profitable, the state will be on the side of the EDF,” Le Maire told RMC radio.

EDF’s major unions have called for a strike, and in addition to criticism from EDF CEO Jean-Bernard Levy, he called the government’s latest decision a “real blow” and announced measures to protect his company’s interests.

Le Maire added on Wednesday that no EDF employee should worry about the future.

“We support this great state company that is the pride of the French people,” he said.

“We will continue to invest in the EDF as our goal is to build new nuclear reactors that are absolutely crucial for the EDF from a strategic point of view.”

Le Maire’s comments came when the head of the French nuclear watchdog warned on Wednesday that the sector could need a “Marshall Plan” to implement new projects.

France produces most of its capacity in obsolete nuclear reactors that have repeatedly been shut down. It is estimated that as of Monday, about 18.9% of their production capacity was offline, limiting supply in record power prices.

The French state owns 84 percent of EDF shares, having lost nearly 40 percent of its value since October.

According to Refinitive Eikon, Norway’s $ 1.4 trillion sovereign wealth fund, EDF’s sixth-largest shareholder, said it was “studying how this will affect us as a minority shareholder,” but without giving specifics.

According to the fund’s latest data, it generally refrains from commenting on its own investments, with the company’s 0.23% stake at the end of 2020 at $ 112 million.

Last week, the EDF forecast that the government’s decision would result in a loss of about 8 billion euros ($ 9.13 billion) in core income in 2022 prior to interest, taxes, depreciation and amortization.

The blow comes as EDF President Macron prepares to finance a billion-dollar investment in new reactors the country plans to build.

Written by Tassilo Hummel and Gvladis Fuche; Edited by Sudip Kar-Gupta and David Evans

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