This agreement follows a memorandum of understanding announced on June 1, 2006 under which both companies agreed to work together on the development of advanced evolutionary power reactor (EPR)-type nuclear power plants in the US, with high performance standards and a high safety track record.
Under the terms of this agreement, EDF will make an initial investment of $350 million into the joint venture, followed by subsequent contributions of up to $275 million upon reaching certain milestones. In exchange, Constellation Energy (CEG) plans to contribute its shareholding in the UniStar Nuclear line of business and to develop up to four standardized EPR nuclear plants on the existing CEG nuclear sites – Calvert Cliffs Nuclear Power Plant, Nine Mile Point Nuclear Station and RE Ginna Nuclear Plant.
The joint venture will be governed by an eight-member board consisting of four EDF-appointed members and four CEG-appointed members, including the chairman.
Additionally, under the terms of the agreements, EDF may acquire up to 9.9% of CEG outstanding shares in the open market, 5% of which can be acquired in the first year of the agreement.
EDF and CEG have also signed a co-operation agreement to review potential joint developments of both companies in the US.
This agreement confirms EDF’s interest in the US nuclear power renaissance and participation in increasing the availability of safe and secure nuclear power which produces no greenhouse gas emissions, said Pierre Gadonneix, chairman and CEO of EDF Group. This alliance builds on the co-operation between Areva and Constellation Energy of the past two years within UniStar, which enabled the EPR to be recognized as an innovative, safe and competitive solution.
The combination of Constellation Energy’s extensive nuclear ownership and operating experience in the US and EDF’s unmatched leadership in the nuclear arena positions the joint-venture at the forefront of America’s nuclear power renaissance, added Mayo Shattuck III, chairman, president and CEO of Constellation Energy.
Many milestones lie ahead since we’ve yet to make a commitment to build, Mr Shattuck continued. But this alliance represents a major accomplishment. It allows us to move forward confidently, leveraging the considerable value of our complementary strengths and operational capabilities, while also maintaining our highly disciplined, risk-managed and value-driven approach to new nuclear.
