France will completely nationalize the energy company EDF, Prime Minister Elisabeth Borne said on Wednesday (6).
The company needs to restructure its debts precisely at a time when several European countries are experiencing an energy crisis.
The future of nuclear energy
The option to fully nationalize the EDF was signaled by President Emmanuel Macron earlier this year. Borne, the prime minister, did not specify whether the nationalization will be carried out through special legislation or through a public tender for the purchase of minority shareholders and did not provide a deadline.
The French state already controlled EDF, with 84% of the company’s shares.
“I can confirm today that the State intends to control 100% of the capital of EDF,” Borne said in a speech to the Chamber of Deputies.
At current prices, the cost to acquire the shares is around 5 billion euros (R$ 27.6 billion).
According to the prime minister, the idea is to guarantee French sovereignty during the war in Ukraine and the challenges ahead.
This is one of the biggest public utilities companies in Europe. What’s more, EDF’s operation is central to France’s nuclear energy strategy — it’s the country’s bid to soften the impact of rising generation prices and the prospect of a disruption in Russian gas supplies.
The problem is that the new nuclear plants have been delayed, and the costs have increased.
EDF faced several problems this year. Half of the reactors in France are disconnected from the system, in part because of technical problems linked to corrosion.
Nuclear power generation had to be cut off several times.
The company was also affected by decisions that forced it to sell energy to rivals at a discounted price (the government tries to avoid a rise in inflation).
The problem is that EDF had to buy back energy, and prices are high.
The company says production losses will reduce its profit by €18.5 billion. Your debt is expected to increase by 40% this year.