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.
“The climate emergency requires strong, radical decisions. We need to have full control of the production and our energy future. We must ensure our sovereignty faced with the consequences of the war and the colossal challenges ahead,” Prime Minister Elisabeth Borne said during her policy speech in parliament in Paris on Wednesday. “That is why I confirm today the intention of the state to hold 100% of the capital of EDF.
Borne didn’t provide specific details on the nationalization of EDF, which is 84%-owned by the state. President Emmanuel Macron had 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.
EDF shares jumped on Borne’s announcement, rising as much as 10% in Paris after having been down sharply prior to her comments. 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 price cap and Russia’s invasion of Ukraine, which is boosting the price at which the company must buy back its electricity output shortfall.
The plan signals that European governments may increasingly be forced to protect their energy companies from the turmoil Russia’s war has caused. Nationalizing EDF would be a largely consensual move in French politics, one that is likely to see a divided lower house rally round Macron who lost his outright majority in elections last month.
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