France nationalizes country’s biggest power provider

The French government has completed the nationalization of the country’s largest energy utility, EDF, with the company officially removed from the Paris stock exchange, according to a release issued by the finance ministry on Thursday.

The takeover follows the company suffering a record loss last year, with nuclear output falling to a 34-year low.

Finance Minister Bruno Le Maire welcomed the nationalization of the enterprise, calling it a “success” and saying that the state takeover was “indispensable” for the energy company’s future.

In late 2022, Paris launched a buyout of the 16% stake in EDF, offering around €10 billion ($10.9 billion) to take full control of the debt-laden electricity provider. The French state had already owned almost 84% of the EDF, while 15% was in the hands of private shareholders, and the remaining 1% held by the utility’s employees.

France generates roughly 70% of its electricity from a nuclear fleet of 56 reactors, all operated by EDF. However, most of them faced recurring corrosion issues and were either shut down or undergoing maintenance, causing a sharp drop in power generation.

Reduced nuclear power output has led to a dramatic increase in the cost of electricity in France last year, forcing EDF to buy power on wholesale markets to cover its production shortfall, and further exacerbating Europe’s energy crisis.

EDF’s net financial debt soared by 50% to nearly $70 billion last year, as it posted a record loss.

The company expects this year’s production to be in a range of 300 to 330 terawatt-hours, rising to 345 terawatt-hours in 2024, which is still far from the 380 terawatt-hours generated in 2019.

Experts say that France, which used to be a power exporter, is expected to rely heavily on electricity imports from neighboring countries, including Germany, to meet domestic demand next winter.

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