Power giant set for state sell-off

12 April 2012

THE STATE-owned French utility that controls much of the UK's electricity supply is to be opened up to private shareholders. France's new Prime Minister Jean-Pierre Raffarin said the legal status of Electricité de France would be 'modified' to allow a 'progressive opening' of its capital.

EdF last month paid £1.4bn to take control of regional power company Seeboard, and already owns London Electricity, the electricity distribution network in East Anglia, West Country supplier SWEB and a stake in Virgin Energy.

France has frustrated its European Union neighbours by allowing EdF to hunt overseas, but sheltering it from competition at home. Raffarin said Gaz de France, EdF's sister company, would also be opened up.

The groups 'should be endowed with the same weapons as their European competitors to take full advantage of the European energy market,' Raffarin said. They should also be able to 'tie up alliances and develop their strategy in Europe and the world, while respecting the requirements of public service.' Both would remain in the public sector and staff would retain their status.

Privatisation prospects have brightened with the election of a centre-right government that questions some French taboos against selling off monopoly public services. EdF has been valued at e70bn (£47bn), but it is saddled with a huge future pensions bill and a massive provision for decommissioning nuclear power stations.

A think-tank close to President Jacques Chirac, whose party won control of parliament in June, proposes a two-stage sell-off, with 10% floated on the stock market initially, rising to 40% by 2007.

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