EDF's U.K. Nuclear Project Raises Questions, State Auditor Says

  • Company's indebtedness limits overseas expansion capacity
  • Delays at other plants raise questions about Hinkley Point

Electricite de France SA’s 18 billion-pound ($25.7 billion) project to build two atomic reactors at Hinkley Point in the U.K. raises “substantial questions” in light of the company’s debt burden and the cost of renovating its domestic nuclear fleet, France’s State Auditor said.

“EDF’s indebtedness, combined with persisting negative free cash flow since 2010, is limiting the group’s expansion capacity abroad, all the more amid its massive investment needs in the French fleet,” Cour des Comptes said in a report late Thursday about the utility’s international strategy from 2009 to 2014.

Delays in the construction of similar power stations in France, Finland and China also raise “questions” about meeting the deadline at Hinkley Point, the auditor said. EDF’s Chief Financial Officer Thomas Piquemal resigned last week, casting doubts on the company’s ability to fund the U.K. project amid falling power prices across Europe. The company also needs to spend 50 billion euros ($55.6 billion) by 2025 to renovate its French nuclear fleet.

EDF Chief Executive Officer Jean-Bernard Levy received renewed support from the French and British governments as he prepares to make a final investment decision for Hinkley Point. The power company, 85 percent owned by the French state, and its Chinese partner have been offered price guarantees by the U.K. government that are almost triple the current market rate.

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