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The government details its plan for EDF

2021-04-12T17:29:15.925Z

In a note sent to the unions, the executive suggests that it wants EDF to finance its development in renewable energies via capital increases.



Speak no more of Hercules.

The name of demigod given to the highly contested EDF reorganization plan is no longer relevant.

The government's written note on the subject, sent to the unions at the end of last week and of which

Le Figaro

was aware, in any case makes no mention of it.

During an unprecedented meeting between representatives of the CGT, CFE-CGC, CFDT and FO, last Tuesday, the Minister of Ecological Transition Barbara Pompili, and the Minister of Treasurer Bruno Le Maire, had indeed promised to communicate to them in writing their project for EDF.

If the code name of the file has been stored, the initial diagram of the reorganization of the historic electrician seems to be still relevant, but the note provides valuable details.

Recall of facts.

The French State has been negotiating for more than a year with the European Commission in order to obtain from Brussels a reform of the price of nuclear power.

Today, EDF sells the electricity resulting from atom fission to its competing suppliers such as Direct Energie at a price of 42 euros per megawatt hour.

This is insufficient to finance the maintenance of the power plant fleet.

The European Commission would have accepted an increase to 49 euros, according to the unions citing Bruno Le Maire ... With a strict separation of the various activities of EDF.

Objective of the very powerful Directorate General for Competition in Brussels: that subsidized activities (nuclear) cannot subsidize others, subject to market laws, such as the supply of electricity to individuals.

But the negotiations, very difficult and technical, dragged on.

France does not want the reorganization to turn into the dismemberment of its national champion.

"Negotiations with the European Commission define the field of possibilities"

Government Note

The latest version of the reorganization plan, which arouses the ire of the unions, is therefore briefly described in the document sent to EDF staff representatives.

"Negotiations with the Commission define the range of possibilities, but will not preempt a debate in Parliament on the future of EDF to which this project will be submitted if it is decided

," specifies the note formatted by the Agence des state holdings.

The reorganization of the group should be submitted to the staff representation bodies (...) taking into account the necessary counterparts for the gains in nuclear and hydroelectricity. "

The parent company would remain EDF SA.

It would own the nuclear and hydraulic activities (these isolated within a quasi-state control directly controlled by the State), the manager of the RTE high voltage network, as well as the support services.

Around 15% privatized today, this entity of around 70,000 people would be 100% nationalized.

Bruno Le Maire told the unions on Tuesday that this operation could cost the state around 10 billion euros.

But this takeover would be partly financed by the partial privatization of a new subsidiary focused on renewable energies (ENR).

New branch

“Mostly owned by EDF SA”

, and therefore by the State, this entity is currently called EDF Énergies Nouvelles et Réseau.

Guarantees would be given as to its public status,

"in particular on a minimum holding threshold by EDF SA"

, specifies the government note.

In addition

to renewable energies

, we would find Enedis (manager of local electricity networks),

“energy supply”

, including Dalkia,

“as well as other subsidiaries and international participations”

.

Above all,

"this entity would remain integrated in human, strategic, financial, accounting and legal terms within the EDF Group"

, insists the government in its note.

But it is of course on the precise degree of integration that Paris is fighting in Brussels against the Directorate General for Competition.

On the contrary, at the start of the discussions, the latter wanted these activities to be strictly separated from those benefiting from public subsidies, EDF SA becoming a simple holding company without any control over its subsidiaries.

And in particular that there is no financial flow from EDF SA to this Énergies nouvelles et Réseau subsidiary.

The problem of capital increases

“Subject to the agreement of the European Commission, EDF SA would be authorized to subscribe to capital transactions of EDF Énergies Nouvelles et Réseau, on condition that it does not use the financial assistance received under the regulation since its inception. in place, ”

however hopes the government.

If this option were not endorsed by Brussels (it does not seem to be at this time in view of the drafting of the note), this would prevent EDF SA from participating in capital increases of its subsidiary.

In which case, this would automatically dilute the participation of the parent company.

Quickly, this would prevent EDF Renewable Energies and Network from proceeding with capital increases because these operations would result in EDF SA below its minimum legal participation threshold that the government promises to the unions to reassure them.

This would therefore prevent EDF from investing massively in renewable energies to catch up with its competitors Iberdrola or Enel.

And would make the reorganization of EDF much less attractive.

"If nothing is done, the decline of the EDF group is inexorable, to the detriment of the entire national community as well as of the group's employees

,

"

warns the government, which wants to convince the recalcitrant unions to support it in its arm of iron with Brussels.

And to assure in its note that

"the project carried by the Government would ensure the sustainability of all of EDF's public service missions and the status of public company for all of its activities"

.

Very important for the unions,

"this project would be done without touching the social status"

.

Bilateral meetings between the government and each of the unions representing EDF staff should be organized in the coming weeks.

Source: lefigaro

All business articles on 2021-04-12

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