The French government will fully nationalize the country’s electricity company EDF, Prime Minister Elizabeth Bourne has announced.
“I confirm to you today that the state intends to control 100% of EDF’s capital,” Bourne told the lower house of parliament.
EDF, already 84% owned by the French state, is facing delays and budget overruns at its new nuclear plants in France and Britain, as well as problems at some of its older reactors.
Notably, half of its reactors in France are currently offline.
At the same time, EDF has been hit hard by government rules that force it to sell power at a discount to rivals, while prices are at record highs.
The French company has estimated that production losses will cut its profits by 18.5 billion euros, while reduced electricity sales will cost it an additional 10.2 billion euros. In addition, its debt is expected to increase by 40% this year, to more than 61 billion euros.
The option of fully nationalizing EDF was also mentioned by President Macron earlier this year, who intends to make the company the main pillar of a huge state investment in new nuclear reactors.
Ms. Bourne did not specify whether the nationalization would take place through special legislation or through a buyout of minority shareholders, nor did she specify the time frame of the move.
However, the group’s shares, which fell by 5% before the announcement, are now rallying more than 13%.