France to nationalise debt-laden EDF

Bloomberg

The French government will nationalize its financially struggling nuclear giant Electricite de France SA to help it ride out Europe’s worst energy crisis in a generation and invest in new atomic plants.
“The climate emergency requires strong, radical decisions,” Prime Minister Elisabeth Borne said during a policy speech in parliament in Paris. “We need to have full control of the production and our energy future.”
Borne didn’t provide specific details of the government’s plans, beyond saying the state will raise its stake in EDF to 100% from 84% currently. No decision has been made at this stage on the modalities of the operation, a spokesman for the finance ministry said.
EDF shares jumped on Borne’s announcement and closed 15% higher in Paris after having been down sharply prior to her comments. The utility’s debt also gained.
President Emmanuel Macron said during his re-election campaign in March that part of the company should be nationalized to bolster French energy independence and its net-zero ambition by building new atomic plants.
The plan is also a sign that European governments may increasingly be forced to protect their energy companies from the turmoil Russia’s war has caused.
Germany’s cabinet rushed through legislation allowing it to rescue struggling utilities such as Uniper SE as Moscow’s squeeze on gas supplies rips through the industry and threatens the wider economy.
EDF has been grappling in recent years with various issues at its aging fleet of reactors and cost overruns when building new ones. Its problems are being exacerbated by a government-imposed cap on electricity prices and Russia’s invasion of Ukraine, which is making it more expensive for the company to cover its own electricity-output shortfall.