French utility EDF's plans to build a nuclear power station in Britain came under renewed pressure on Monday after its finance director quit over the risk he sees to the company's future.
Reacting to the shock resignation, EDF reaffirmed its plan to go ahead with the £18 billion Hinkley Point project in southwest England. The French and British governments also both said they still backed it.
Shares in the 85 percent state-owned company were down close to 9 percent, however. They are the worst performers among leading European utilities this year, with a fall of 27 percent amid worries about Hinkley Point and wider concerns about demands on its finances.
The project was first announced in October 2013, but a final investment decision has been repeatedly delayed.
Developed as a partnership between state-controlled EDF and Chinese group CGN, the plan to build two 1,650-megawatt nuclear reactors, among the biggest in the world, at Hinkley Point has faced opposition from unions and within EDF's board.
Sources familiar with the situation say finance director Thomas Piquemal shared those concerns and that was why he had quit.
One source with knowledge of the atmosphere at board level described a "battle for influence at the top of the company" over "decisions taken outside the business" – a reference to political and diplomatic aspects of the project.
Analysts say one worry among EDF investors is that power price terms have been agreed with the British government even though the final cost of the project remains uncertain. Another is that EDF may struggle to get significant outside financing.
EDF is also having to prop up Areva, the loss-making designer of the plant whose prototype is under construction at Flamanville in France.
A further concern is that the agreed British pricing terms are conditional on successful completion of Flamanville – itself facing technical troubles and delays amid question marks over the safety of the new-generation European Pressurised Reactor (EPR) technology they use.
There are also questions over how EDF will pay for the decommissioning of its own ageing nuclear fleet and the strength of the French government's commitment to nuclear as presidential elections loom next year.
Last month, EDF cut its dividend and said it would pay the government in stock to help make ends meet.
In Britain, Hinkley Point is central to the country's energy security strategy as its own fleet of nuclear plants ages. Opponents argue that say the price guarantees the government has promised clash with its policy of promoting renewables.
In an email on Monday, EDF CEO Jean-Bernard Levy repeated that the go-ahead would come soon, having said last month that the first Hinkley Point concrete should be poured in 2019.
"With the support of its state shareholder, EDF confirms it is studying the investment in the two Hinkley Point reactors in the best financial conditions for the group, with the aim of announcing a final investment decision soon," Levy said.
Levy said that he regretted the hastiness of Piquemal's departure, without elaborating.
EDF's finance head for France, Xavier Girre, will take over in an interim role.
Analyst Xavier Caroen, of broker Bryan Garnier, said the departure of Piquemal was "clearly negative" for EDF.
"The CFO was pushing for a three-year delay to make a final decision on this project, while Levy, notably urged by the French government, was pushing for a short-term decision," he said.
French Economy Minister Emmanuel Macron reaffirmed his backing for Levy.
"We also renew our full support for the Hinkley Point project, which is an important project for EDF and will be profitable over the coming 30 years," he added.
Date created : 2016-03-07