Tentative moves on EdF ownership

3 August 2002

The new French government wants to change the legal status of EdF, and open its ownership to investors, prime minister Jean-Pierre Raffarin said on 3 July during his inaugural speech. Raffarin said that the ownership of the two government energy corporations, EdF and Gaz de France (GdF), would be gradually opened within the National Assembly's five-year term, but he didn't say when the process would start or which company would be first.

EdF would remain in the public sector, Raffarin said, with the French government retaining at least a 51% stake. One proposal suggested by sources close to the prime minister is for just 12% of EdF going into private hands, including 2% for EdF's current European utility partners in Germany and Italy. The rest would be held by employees, GdF, and three external funds that would be set up to resolve EdF's liabilities for pensions, nuclear expenditures and its local distribution network.

Raffarin told parliament that EdF: "Must be given the same weapons as its European counterparts to take full benefit of the European energy market and promote their industrial and social plans." EdF's special monopoly status, its closed ownership, and its opaque accounts have drawn fire from other European utilities and threatened EdF's expansion potential. Influential French trade unions have expressed strong opposition to the plan.

EdF's liabilities for the back end of the nuclear fuel cycle and nuclear plant decommissioning amount to E51.1 billion.

• EdF is expecting its annual sales to exceed r60 billion by 2005, an increase of more than 50% over current levels. The utility, which posted a revenue of E40.7 billion in 2001, wants half its income to come from its electricity business outside France by 2005. It has budgeted E19 billion for such expansion between 2001 and 2003.
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