PARIS — France will provide €2.1 billion to state-controlled energy incumbent EDF to help the company tackle financial difficulties and bear the cost of the construction of new nuclear reactors.
“This capital increase decision should open a new page in the history of EDF,” France’s Economy and Finance Minister Bruno Le Maire told reporters on Friday in announcing the decision.
“The objective is to allow EDF to restore its accounts, to invest in the future and to be able to carry out the investment projects announced by the President of the Republic in Belfort in the best possible financial, economic and technological conditions,” Le Maire said. French President Emmanuel Macron announced last week that EDF will build six new nuclear reactors.
Le Maire said EDF’s financial difficulties are mainly due to a drop of electricity production and that the company’s expected revenue from energy production in 2022 will be €11 billion less than expected.
EDF has had to bear the cost of government measures to cap energy prices. Le Maire argued that this was not the main reason for helping EDF. Last week EDF also purchased GE’s nuclear steam turbines business.
The state holds 83.88 percent of EDF’s shares. The public support comes as part of a wider €2.5 billion capital increase announced Friday. Le Maire hoped that the state support will send “a signal to private investors.”
Paris and Brussels discussed a reform of EDF to make France compliant with the bloc’s competition rules, but the project was abandoned last summer.