Analyst: Hinkley Point C Nuclear Project Makes EDF “Uninvestible”

 Analyst: Hinkley Point C Nuclear Project Makes EDF “Uninvestible”

Financial analysts say the dual-unit, 3.2-GW Hinkley Point C nuclear project in the U.K. is too much of a financial risk for French utility EDF and the government which owns a majority of EDF.
 
RBC Capital Markets said in Bloomberg that EDF is “uninvestible” and that the government should look into re-nationalizing the company if it moves forward with the £18 billion ($25.8 billion) project without reinforcing its finances. Martin Young, an analyst with RBC Capital Markets, said in the article that the project’s political dimensions make the stock risky for minority shareholders.
 
“EDF needs a meaningful action plan to secure its own future,” Young was quoted as saying. “EDF’s management should not risk bringing the company to its knees, and should not proceed with Hinkley Point.”
 
The U.K. and French governments have both thrown their support behind the project. Chinese company CGN bought a 33.5 percent stake in Hinkley Point, but EDF is struggling to find other investors.
 
EDF Chairman Jean-Bernard Lévy requested a project risk review at the end of 2015 from nuclear expert Yannick d’Escatha ahead of the final decision on investment.
 
“We judged that these risks had been accurately identified and they can be overcome as long as all the safety measures that we recommend are implemented,” d’Escatha said. “So from the viewpoint of the risks and under these conditions – the project can be launched.”
 
Lévy discussed the review to staff, saying he has decided to implement all of the recommendations, though he did not say what the recommendations are.
 
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