EDF Said to Seek New Alternatives to Finance U.K. Nuclear Plantby
Hinkley Point is U.K.'s first new reactor since 1995
EDF holds majority stake in the project, China owns the rest
Electricite de France SA is seeking additional funding for an 18 billion pound ($25.8 billion) nuclear plant in the U.K. as its finances are suffering from the rout in power prices and a shrinking domestic market share, people with knowledge of the matter said.
The funding of the Hinkley Point project isn’t completed so a final investment decision can’t be made by the board, said the people, asking not to be identified because the deliberations are private.
The state-controlled company need to reconsider financing was first reported by Les Echos on Tuesday.
EDF said last year it would finance two-thirds of Hinkley Point, while China General Nuclear Power Corp. would fund the rest. The project is has reached a level of maturity where a final investment decision will be taken, Jean-Bernard Levy, EDF’s chief executive officer, said in a interview with Le Journal du Dimanche on Jan. 24. EDF may sell part of its stake in the project once the construction is “well under way,” he said.
EDF union representatives urged the French company this month to delay or even drop the Hinkley Point project as the group’s finances are constrained by the need to finance the renovation of its aging fleet of 58 nuclear plants in France, cost overruns on the construction of a similar reactor in France, and a plan to buy a majority stake in Areva SA’s troubled reactor unit.
Investment in new projects will be financed by reallocating proceeds from sales of other assets, EDF said last month. EDF will reduce its French workforce by 5 percent as part of a plan to cut operational expenditure by 700 million euros ($761 million) by 2018 compared with its 2015 cost base.