PARIS, July 3 (Reuters) - Ratings agency Moody’s said on Monday an upward revision of construction costs of Hinkley Point C nuclear power station in Britain and the risk of a delay in its start are negative for EDF’s credit rating.
“The company estimates that its internal rate of return on the project will drop to 8.5 from 9.0 percent initially. Should the completion be delayed, this will further fall to 8.2 percent,” Moody’s lead analyst Paul Marty said in an emailed statement.
French state-owned utility EDF flagged a construction cost overrun at its Hinkley Point C nuclear power station in Britain on Monday, in a new blow for a group of EDF projects already facing delays, rising costs and other problems.
“More generally, the announcement illustrates the risks for EDF and its partner China General Nuclear Power Corporation of constructing the power station and of shouldering the financial implications of a very long construction phase during which the investment will not generate any cash flow.”
Moody’s has A3 long-term rating with a stable outlook on EDF. (Reporting by Maya Nikolaeva, editing by David Evans)