Macron pumps nearly £2bn into EDF after capping energy prices Business

French President Emmanuel Macron has been forced to pump more than €2bn (£1.7bn) into EDF after ordering it to sell electricity below market prices.

The French state will buy the majority of a €2.5 billion share sale by the energy giant, which is struggling to shore up its dilapidated balance sheet.

The government, which has an 84% stake in EDF, has told the company it can only raise prices by 4% this year in a bid to protect households from soaring energy bills.

The order, which wiped out a fifth of the company’s value last month, is expected to slash profits by around 8 billion euros this year.

EDF is also grappling with a drop in nuclear production by carrying out repairs and maintenance of aging reactors on its feet.

While the Paris-based utility said rising energy prices led to an 11% increase in earnings before interest, taxes, depreciation and amortization last year, its outlook for 2022 was significantly worse.

He said the combination of price caps and falling nuclear output meant profits would fall by €11 billion in 2022 – more than offsetting the benefits of higher prices.

The government intervention comes amid growing public anger over energy prices just two months before a presidential election in which President Macron is expected to run.

He pledged to financially protect the company and also unveiled plans to build a series of new nuclear reactors over the next few decades, which will be built and operated by EDF.

The country’s finance minister, Bruno Le Maire, told French radio the state was buying 2.1 billion euros worth of shares to retain its stake and help the company, but insisted the The deal had “nothing to do” with full nationalization.

EDF also announced that it will sell an additional €3 billion of assets over the next two years in a bid to strengthen its balance sheet and offer investors the option of receiving their stock dividend this year and next.

In addition to its plants in France, EDF owns the UK nuclear fleet and several UK gas-fired power stations, and is building the new Hinkley Point C nuclear power station in Somerset.

It also has about 11% of the UK domestic electricity market and about 9% of the gas market.