• State support for EDF could be anti-competitive: legal study
  • Group says Brussels would need to approve refinancing plan

The European Union may block the French government from providing extra funding to help Electricite de France SA finance construction of the Hinkley Point C nuclear reactor in the U.K., according to a study commissioned by Greenpeace.

Measures to re-capitalize EDF to allow it to participate in the 18 billion-pound ($25.8 billion) project such as waiving cash dividend payments in favor of shares may constitute state aid under EU law and a threat to competition, according to a legal opinion by London-based Monckton Chambers commissioned by the environmental group, which opposes the nuclear plant. The funding would then need to be investigated and approved by Brussels, Greenpeace said in a statement today.

EDF is due to make a final investment decision on the project in early May. The utility, 85 percent-owned by the state, has been in talks with the government about ways to improve its balance sheet. Both France and the U.K. support Hinkley Point in the face of strong criticism from unions, market analysts and internally, from former EDF Chief Financial Officer, Thomas Piquemal, who resigned in March.

If France decided to give financial aid to EDF without prior approval of the European Commission, third parties would be able to ask the commission to open an investigation, or could challenge the measures before a national court, according to the legal opinion.

“We’ll work with Greenpeace to challenge that if it happens,” Dale Vince, founder of U.K.-based green energy supplier, Ecotricity, said in the statement.

A subsidy from the U.K. of 92.50 pounds a megawatt-hour for power produced from the station for 35 years was approved by competition authorities in October 2014. Austria last year filed a legal challenge against the commission’s decision to allow U.K. subsidies.

EDF is due to hold a board meeting to discuss the financing of the project today.

The Hinkley project “has been thoroughly discussed at European Commission level and has been put under pressure in the past, so I don’t see that it would suddenly be considered as state aid,” Cosma Panzacchi, an analyst at Sandford C. Bernstein Ltd., said by phone from London.

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