French energy giant EDF's board approved Thursday the building of a nuclear power station in Britain, a source close to talks said, in a project which critics fear could bankrupt the French utility. EDF's directors had been deeply divided over the planned construction of two nuclear reactors at Hinkley Point in south-west England for £18 billion (21.4 billion euros, $23.8 billion). In the end, it won backing from 10 members of the board of directors, while seven voted against, the source told AFP.
Upping the tension, one board member resigned just before the crunch meeting, saying he disagreed with the plan, reducing the board of directors to 17. In a letter seen by AFP, Gerard Magnin said he could no longer support France's strategy to push nuclear energy at the expense of other options.
"As a board member backed by the shareholding government I no longer wish to support a strategy with which I disagree," Magnin said in the letter. The plan to build the EPR latest generation reactors, signed in 2013, is to be carried out by EDF with Chinese partner CGN, but has hit several snags since. The reactors are due to go online from 2025. Weighing on its viability is the decision of French nuclear company Areva to drop out because of financial difficulties and the subsequent take-over of Areva's obligations by EDF at the behest of the French government, which owns 85 percent of EDF.
This pushed EDF, which was already struggling under a debt mountain of 37.4 billion euros at the end of last year, to go further into the red, leading some to question the group's ability to juggle all its liabilities, including the renovation of France's nuclear operations and the take-over of Areva's reactors amid falling energy prices. Needing cash, EDF is in talks to sell just under half of its power unit RTE for over four billion euros, a source close the negotiations told AFP Thursday. And earlier this week, the French government said it would foot three billion euros of a four-billion capital increase by EDF.
The EDF board, which began meeting at around 1230 GMT, was due to decide on the final investment decision which will authorise CEO Jean-Bernard Levy to sign the main contracts with the British government and CGN. Unions however still fear for EDF's financial survival and have asked for a delay of at least three years of any decision on the British nuclear plans, even waging a court battle to stop the momentum. "The situation in the company is extremely tense, and the chairman is more than ever isolated from his top managers and from unions," said one union source.
EDF chief financial officer Thomas Piquemal resigned in March over the threat the project represents to the company's finances, and Levy acknowledged that the company's "financial trajectory is taut". EPR reactors, developed mostly by France's Areva, are the latest generation of nuclear reactors and among the most powerful in the world, and according to Areva, the safest. There are only two other ongoing EPR reactor projects in Europe, one in Normandy in France and the other in Finland, and both have been plagued by delays and cost overruns.
Comments
Comments are closed.