PARIS (Reuters) - French utility EDF (EDF.PA) is struggling to find financing for its 18 billion pound project to build two nuclear reactors in Hinkley Point, Britain and is seeking French state support, financial daily Les Echos reported on Tuesday.
Reactor designer Areva AREVA.PA had been scheduled to take a 10 percent stake in the project, but four years of losses have eaten up its capital. Its reactor division is being taken over by EDF in a state-led rescue operation later this year.
This forced EDF to take a majority stake of 66.5 percent in the UK project, after its Chinese partner CGN agreed to take a 33.5 percent stake in October.
Les Echos said EDF is putting pressure on the French state -- which owns 85 percent of EDF -- to help it find new financing, possibly with another state entity that could take over the stake earmarked for Areva.
EDF and the French government declined to comment.
EDF, which has to borrow money every year just to pay its dividend, faces massive cash outlays in the coming years -- 55 billion euros ($60 billion) to upgrade its ageing reactors, five billion euros to install Linky smart meters and several billions to buy Areva’s reactor arm.
Rising costs for nuclear decommissioning and nuclear waste storage are also weighing on its balance sheet.
Hinkley Point will be discussed at an EDF board meeting on Wednesday, but the paper said a final investment decision on the project would come at the earliest at the next board meeting, to be held before the firm releases 2015 earnings on Feb 16.
EDF’s employee shareholders have said the Hinkley Point project puts the very survival of the French utility at risk and Standard & Poor’s has warned that it might downgrade EDF’s debt if it goes ahead with Hinkley Point.
But the Hinkley Point project is crucial for France to keep its nuclear industry alive before it begins replacing EDF’s ageing fleet of 58 reactors in the next decade.
In an internal document seen by Reuters last week, EDF spoke of a plan to bring up to 10 Areva-designed European Pressurised Reactors (EPR) online by 2030.
Reporting by Geert De Clercq; Editing by Katharine Houreld