France announces that it will fully nationalize energy giant EDF

The French government will fully nationalize EDF and take control of the heavily indebted company amid a pan-European energy crisis.

n Ireland EDF is one of the financiers of the proposed €2bn Codling Wind Park off the coast of Wicklow, which is expected to power up to 1.2 million homes.

French Prime Minister Elisabeth Borne confirmed the decision yesterday. EDF is already 84 percent state-owned and is one of the largest European energy suppliers. It is at the heart of France’s nuclear strategy, which the government is counting on to mitigate the impact of rising energy prices, exacerbated by the prospect of an abrupt halt to Russian gas supplies.

Instead of being an ace in government hands, however, it has become a major problem with billions of dollars in budget overruns due to years of delays in new nuclear power plants in France and the UK.

“I confirm to you today that the state intends to control 100 percent of EDF’s capital,” Ms Borne said in her keynote speech in the House of Commons, as she set out the priorities of her minority government.

“We must ensure our sovereignty in the face of war (in Ukraine) and the colossal challenges that loom,” she said, adding that full nationalization would help EDF carry out “ambitious and essential projects” for France’s energy future.

Half of EDF’s aging reactors in France are currently out of service, in some cases due to corrosion problems, forcing the company to repeatedly cut planned nuclear output this year as Europe scrambles to find alternatives to Russian gas supplies.

EDF has also been hurt by government regulations that force it to sell electricity to competitors at a discount to protect French consumers from a sharp rise in the cost of living.

This is a major drain on EDF’s finances as the group sold its estimated nuclear capacity before the end of the fiscal year and had to buy back power sold in a volatile market with prices at historic highs.

The company has estimated production losses will reduce its core profit by €18.5 billion and discounted power sales will cost it another €10.2 billion. Debt is expected to increase by 40 percent this year to over 61 billion euros. France announces that it will fully nationalize energy giant EDF

Fry Electronics Team

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