French Prime Minister, Élisabeth Borne, has revealed her intention to renationalize the indebted electricity giant, EDF, to mitigate the impact of escalating energy prices.
EDF, a major European utility and a cornerstone of France's nuclear strategy, is currently 84% state-owned. The government sees EDF as a crucial element in countering the effects of surging energy costs, particularly amid concerns about potential disruptions in Russian gas supplies.
However, EDF has faced financial strains, with significant budget overruns amounting to billions of euros. The company has been selling its projected nuclear output in advance and later repurchasing electricity, a strategy that has become challenging in the current volatile market characterized by historically high prices. The French government is hopeful that EDF's nuclear capacity can help alleviate the impact of soaring energy prices.
As part of its policy priorities, the French government aims to increase its ownership stake in EDF from 84% to 100%. During her policy speech in parliament, Prime Minister Borne affirmed this goal, stating, "I confirm today that the state intends to hold 100% of EDF's capital." She emphasized the need to safeguard national sovereignty in the face of ongoing conflicts and looming challenges, such as the situation in Ukraine.
While a specific timeframe for the nationalization was not provided, the estimated cost of the move is €5 billion.
