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French state nationalizes energy giant EDF

In order to weather the energy crisis, the French government is planning a complete nationalization of the energy company EDF, Luminus’ parent company. Shares shot up 14 percent on the Paris stock exchange on Wednesday.

“The climate emergency requires strong decisions.” For example, French Prime Minister Elisabeth Borne announced plans to

, already 84 percent owned by the French government. “I can confirm that the state plans to increase its stake to 100 percent,” she told the Assemblée Nationale, where she made her policy statement on Wednesday afternoon.

The nationalization of France’s largest electricity producer does not come as a complete surprise. President Emmanuel Macron has alluded to it several times recently. He wants to make the debt-laden EDF the hub for the multi-billion investments that Paris plans in new nuclear power plants.

Macron is committed to nuclear energy – which does not emit CO2 – in the fight against climate change. But the move was mainly prompted by the Russian war in Ukraine, which led to a crisis and high prices in the energy market. “We must have complete control over production and our energy future,” Borne said. “This step will enable the EDF to increase its production capacity and to realize ambitious and indispensable plans for our future as quickly as possible.” EDF already operates a considerable arsenal of nuclear power plants.

Enthusiastic investors

It is not yet clear how the nationalization will take place and at what price the French state wants to buy out private and institutional shareholders. They control 15 percent of the company. The remaining 1 percent is owned by employees. A spokesman for the French Ministry of Finance said no decision has yet been made on the details or timing of the operation.

Investors nevertheless reacted enthusiastically to the plans of the French government. After an initial gain of 8 percent, the stock closed 14 percent higher on the Paris stock exchange. That does not alter the fact that Europe’s largest energy company has lost 11 percent of its stock market value since the beginning of the year.

Profile EDF

  • Owner: France (84%), individual shareholders (15%) and employees (1%).
  • 167,160 employees.
  • Turnover (2021): 84.5 billion euros.
  • Operating profit: 18 billion euros.
  • Net profit: 5.1 billion euros.


State aid

In 2019, a similar plan was already on the table for EDF, the parent company of Luminus, which is active in Belgium. Then the French government considered buy out the minority shareholders as part of a restructuring that allowed for the life extension of the old nuclear power plants.

After more than a year of negotiations, that attempt failed because the European Commission saw the proposed scheme as a form of state aid and aimed for a stricter division of activities into hydropower and renewable energy.

EDF has since been in the corner where the blows fall. The financially poor company is struggling with outdated reactors – twelve reactors were shut down due to cracks – and cost overruns in the construction of the new reactors. It is also building a new power station in the United Kingdom.

France is not the only European country that intervenes with a company to limit the consequences of the energy crisis. Germany launches rescue operation by gasleverancier Uniperthe largest buyer of Russian gas in the country.

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