PARIS, July 28 (Reuters) – The French government will not be submitting legislation in the near future on plans to reform power group EDF (EDF.PA) as it has yet to reach agreement with the European Union on its red lines, the CGT union said on Wednesday.
This diminishes the chance that the restructure, originally code-named “Project Hercules”, will be launched before the 2022 presidential elections as the legislative window is nearly closed.
The CGT said in a statement that state representatives on the company’s board will inform EDF directors of the government’s intention later on Wednesday, adding that it had been notified of the development by government sources.
EDF declined to comment while the finance ministry was not immediately available for comment.
The reform envisaged placing EDF’s profitable renewables business in a different entity so it could flourish, unburdened by the debt-laden nuclear assets which would be parked in their own entity.
Another key plank of the planned overhaul involved higher price guarantees on nuclear energy EDF sells to third-party providers, helping the debt-laden utility to cover production costs.
But it has been fiercely opposed by trade unions and bogged down in negotiations with the European Commission, meaning hopes of going ahead with it before next year’s election had narrowed substantially, sources told Reuters earlier this month. read more
The French government – which owns nearly 84% of EDF – needs EU clearance to make sure the new structure would not amount to state aid or crimp competition in a power market still largely dominated by the former monopoly operator.
If the reform is not launched before the election, that could disappoint EDF shareholders as well as investors more widely, as it was part of the business-friendly changes President Emmanuel Macron promised early in his term.
The EDF reform was not featured on the items to be handled by parliament during its summer sitting. The next window would have been September, before parliament becomes bogged down with the 2022 budget. Sessions end in March next year in time for the election.
EDF will publish 2021 first half earnings on Thursday.
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