|The French power groups are to form a strategic partnership to focus on bids for contracts in countries that lack a nuclear industry|
Areva and EDF, France’s nuclear groups, must end years of bickering and form a strategic partnership to win overseas contracts that could see EDF raise its stake in the nuclear reactor maker, the French government said.
State-owned Areva was given the go-ahead for a 15 per cent capital increase to finance investments, in which EDF could raise its 2.4 per cent stake to 7 per cent, according to officials.
Christine Lagarde, finance minister, said on Wednesday that Areva and EDF “must imperatively get along” following months of rancour between Henri Proglio, chairman of EDF, and Anne Lauvergeon, Areva’s chief executive.
Mr Proglio has publicly questioned Areva’s independence and insisted that EDF, the state-owned utility which operates France’s 58 nuclear reactors, was best placed to lead France’s nuclear industry.
For her part, Ms Lauvergeon has called for relations between the two companies to be “modernised” but has said that, as Areva’s main client, EDF should take a leading role.
The strategic partnership will focus on bids for contracts in countries which do not have a nuclear industry. President Nicolas Sarkozy said it was in line with the government’s aim of reinforcing its nuclear strategy around national champions. He said it did not inhibit the two companies from co-operating with other industry groups.
The decision followed the publication on Tuesday night of a long-awaited report into the organisation of the French nuclear industry.
This was commissioned by the government after the highly embarrassing defeat in Abu Dhabi last year, where France saw its new generation EPR reactor rejected in a key $20bn nuclear tender in favour of a lower cost option from a South Korean consortium.
The report, written by François Roussely, the former head of EDF, said the outcome of the Abu Dhabi tender could have been different and that it was “essential” for a new strategic partnership between the two companies to win overseas contracts.
EDF would not comment on Wednesday but is expected to make a statement on Friday at its half-year results. Areva said it had “always agreed that in newcomer countries that do not have nuclear power, the lead must be taken by a utility”.
It added that it was “pleased with the conclusions reached in the Roussely report”, which it said were “in line with Areva’s desire to rethink its partnership with EDF”.
However, the idea that EDF might take a bigger stake in Areva is controversial.
The 15 per cent capital increase equates to between €2bn-€3bn, according to analysts, and is necessary because Areva’s finances have been strained by construction delays and cost overruns at a nuclear plant in Finland.