The European Commission has opened an in-depth investigation to determine whether France broke State Aid rules when it brokered a €4 billion bailout for Areva, the company due to supply the reactor for EDF’s Hinkley Point C project.
Areva is mainly controlled by the French state, which also has a major stake in EDF. The restructuring has also forced EDF to pay €2.5 billion to acquire a majority stake in Areva. The reactor maker has been struggling to cope with the spiralling cost and huge delays at two nuclear construction projects, at Olkiluoto in Finland and Flamanville in France.
France notified the Commission of the restructuring plan in April. The plan includes state aid in the form of a public capital injection of four billion euros. It also involves a renewed focus on the nuclear fuel cycle through various divestments and withdrawal from certain activities.
The Commission said that it will investigate whether the restructuring plan will give Areva long-term viability and allow it to operate without constant injections of public funds. It will ensure that the group makes a sufficient, real contribution to the costs of its restructuring. Lastly, it must check that the measures proposed by France to limit distortions of competition are proportionate to the distortions created by the aid.
The Commission added: “Opening this in-depth investigation will give interested third parties an opportunity to submit their comments and there are no foregone conclusions about its findings.”