EDF and Areva to sign strategic accord

29 July 2010

A French government review has proposed that France-based nuclear utility EDF and France-based nuclear power plant vendor Areva should form a non-exclusive strategic partnership.

The two companies were criticised in France when their consortium (with oil and gas firm Total and rival French utility GDF Suez) lost out on a $20 billion contract for four reactors in Abu Dhabi to a KEPCO-lead Korean consortium.

Also, the prime minister's office has announced a 15% increase in Areva's capital in 2010 from 'industrial and financial investors'. (Although an estimate of its capital was difficult to estimate, in 2009, it reported operational costs (sales, R&D and general administration costs) of EUR 8.76 billion). The plan also allows for the possibility of EDF to take a share of Areva.

As well as optimising the EDF/Areva EPR reactor design, the alliance would also reinforce the 'security and competitiveness' of the French nuclear fuel supply.

Despite the alliance, the 1100MW Atmea reactor project, a joint venture of Areva and GDF Suez, would continue its way through the ASN certification process, according to a press release from the prime minister's office.

In a supporting study, Francois Roussely, a former EDF top executive, said that the French international offering demonstrated organisational problems, weakness of competitiveness of supply, and availability of financing, human resources and the mobilisation of R&D. "The companies have to make considerable efforts to improve their offer against other industry giants," he said.

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