French Prime Minister Elisabeth Borne has confirmed that her government plans to fully nationalise electric utility company Électricité de France (EDF) in order to ensure energy security in the country.
The move from the French government is expected to give it greater control over the debt-laden utility’s restructuring amid an energy crisis in Europe. As of 31 December 2021, EDF’s net financial debt was €43bn.
In her speech in the lower house of the French Parliament, Borne said: “I confirm to you today that the state intends to control 100 per cent of EDF’s capital.”
The Prime Minister said that France has to ensure its sovereignty in the face of the war in Ukraine and the impending colossal challenges.
Currently, the French government has a stake of nearly 84% in EDF, which is among the largest utilities in Europe and is at the core of the country’s nuclear strategy.
Considering the prevailing market prices, the French government may have to pay close to €5bn to buy out the stake it does not already own in the electric utility, reported Reuters.
However, Borne did not provide details on whether the nationalisation of EDF will be undertaken by bringing in special legislation or by launching a public tender to buy out minority shareholders. The Prime Minister also did not give a time frame.
EDF stated: “The Board of Directors has taken note of the State’s intention to hold 100% of EDF’s capital and will provide all its support to achieve this, according to the terms adopted by the State and in the interest of all the parties concerned.”
Last year, it was reported that the government was expected to spend around €10bn to buy out EDF’s minority shareholders.
EDF has been hit with various problems this year. Currently, 50% of its ageing reactors in France are not in operations, partly because of corrosion problems.
As a result, the company has been compelled to repeatedly slash its nuclear output at a time when Europe is struggling to find alternatives to gas supplies from Russia.
Besides, EDF has been hurt by the French government’s moves to force it to sell electricity to rivals at a discounted price in a bid to protect consumers from a sharp spike in the cost of living.
