EDF Chief Executive Officer Jean-Bernard Levy confirmed he is negotiating with the French government in order to secure more funds for the Hinkley Point C project, which faces a new hurdle with a financial report that called EDF “uninvestible,” due to the precarious situation it would put itself in by going ahead with the project. But Levy also said he was sure that the challenges would be met for the project to eventually be given a green light.
Investors have already been rattled by the resignation of EDF's chief financial officer, who was advocating for an additional three-year delay in making the decision.
The latest wrinkles involve a report from financial analysts at RBC Capital Markets that warned EDF not to go ahead with the $25.8 billion project unless it first sought to “re-nationalize” itself. The company is already 85 percent owned by the government.
In a letter to EDF staff sent on Friday, Levy said the company was already restructuring part of its financial profile, noting the company was seeking to lower operating expenses and try to lower its debt with the sale of non-strategic assets.
EDF has also reached an agreement with the French government that allows it to pay the dividend to its largest shareholder in shares, rather than cash, for 2015. This amounts to about $2 billion in financial relief, the World Nuclear Association reported.
While the challenge of securing finances was daunting during a period of low prices for electricity, Levy said in his letter that it “is clear that I will not engage EDF in (the Hinkley Point C) project before these conditions are met.”
However, Levy noted that Hinkley Point C represented 15 percent of EDF's investments for a span of about 10 years. The return to be expected was about 9 percent over a span of 60 years. With that in mind, “I am sure that this is a good project for the group and that in the near future all conditions will come together for it to be definitely launched,” he said.