nuclear-news

EDF want French tax-payers’ financial aid for UK Hinkley Point Nuclear Projectr

EDF Asks French Government for Aid for Hinkley Point Nuclear Plant CEO Jean Bernard Levy says EDF won’t engage in project without necessary commitments from state http://www.wsj.com/articles/edf-asks-french-government-for-aid-for-hinkley-point-nuclear-plant-1457797452  By  INTI LANDAURO March 12, 2016

PARIS— Electricité de France SA Chief Executive Jean-Bernard Levysaid he is seeking financial support from the French government to develop the Hinkley Point nuclear plant in southern England, as the project faces fierce scrutiny following the resignation of the company’s No. 2.

In a letter sent to company employees on Friday, Mr. Levy said EDF wouldn’t engage in the £18 billion ($25.89 billion) project unless it was able to secure necessary financial commitments from the state, which holds almost 85% of the utility.

Two EDF officials who requested anonymity confirmed Mr. Levy’s comments. The letter was sent four days after Chief Financial Officer Thomas Piquemal quit unexpectedly on concerns that the project would threaten the company’s financial stability.

The Hinkley Point project is the centerpiece of a series of business deals between the U.K. and China announced last year, with China General Nuclear Power Corp. agreeing to take a 33.5% stake in it.

The past week’s letter and CFO resignation are signs that scrutiny over the project has grown, despite support from the French and U.K. governments.

Even though the conditions granted by the U.K. government—with the pledge to buy the electricity generated around three times the current market price—would make it profitable, union representatives on EDF’s board have said Hinkley Point could saddle the company with too much debt.

EDF, which has €37.4 billion ($41.70 billion) in net debt, had its credit rating put on review for a downgrade by Moody’s Investors Service last month. Also last month, EDF said it would reduce its dividend and offer stockholders part payment in shares to bolster its finances, as well as selling assets and reducing capital spending. The utility is separatelyinvolved in the financial rescue of state-controlled Areva SA, which has lost money for the past five years. EDF last year agreed to pay at least €1.25 billion for a majority stake in Areva NP, the unit that manufactures nuclear reactors.

Separately, the risk associated with the construction of EDF’s EPR reactor design also raises uncertainty about the project. To this day, no plants using the technology have been completed. The first two being built, in Finland and in northern France, have run way over budget and are years behind schedule.

Write to Inti Landauro at inti.landauro@wsj.com

March 13, 2016 - Posted by Christina Macpherson | France, politics, UK