France is considering using funds from depositors in a centuries-old savings account to finance part of a €50bn plan to build six nuclear reactors, one of the world’s most ambitious energy programmes.
Putting together financing for nuclear projects is challenging because of the high costs that weigh on state balance sheets and the wariness of private investors of the decades-long construction periods and safety risks. As a result, state-owned nuclear operator EDF and the French government are considering tapping into the resources provided by the popular “Livret A” savings account, two people familiar with the discussions said on Thursday.
With about €370bn in deposits, Livret A funds are deployed by the Caisse des Dépôts et Consignations (CDC), a state-linked bank that carries out projects in the public interest, such as building social housing.
The popularity of Livret A means the CDC has additional funds to invest and its head Eric Lombard has said it should play a bigger role in financing the green transition.
Between €10bn to €20bn of Livret A funds could be freed up for the nuclear needs, one of the people said.
The decision will ultimately rest on whether other forms of financing, including borrowing or issuing bonds, are deemed more cost-effective, the people added. French business daily Les Echos first reported the discussions.
Brussels will have to weigh in on the financing underpinning EDF’s nuclear plans to ensure it does not run foul of state aid rules. EDF, which is in the process of being fully nationalised, declined to comment.
President Emmanuel Macron ended years of uncertainty over whether France would recommit to nuclear power when he outlined plans for several new plants in 2021, just months before Russia’s invasion of Ukraine sparked chaos on energy markets. That gave a boost to the industry globally in the wake of the 2011 Fukushima disaster.
France already generates about 70 per cent of its power from nuclear reactors, which were largely built in the 1980s and 1990s.
The way reactors are bankrolled plays a big part in the final bill of a project because of interest repayments, which can influence the price at which electricity is later sold.
“The production cost is very dependent on how construction is financed,” said Valérie Faudon, executive director of French nuclear lobby group Sfen.
Britain is exploring a complex private-public financing model for the Sizewell C nuclear plant developed by EDF that promises investors a form of upfront revenue, and funded through a surcharge on consumers’ energy bills.
Critics of the potential UK funding model have warned, however, that consumers could be left exposed if construction of the plants takes longer than anticipated or goes well over budget, as has happened frequently with European nuclear projects.
France aims to start construction work on the first pair of reactors by 2027 and to be completed by 2035. The last reactor that Paris commissioned, however, is more than a decade behind schedule.
Additional reporting from David Sheppard in London