State aid blow to French nuclear generator

Government agrees to remove state aid guarantees, could force repayment of subsidies worth €888m

Plans by Electricité de France (EDF) to build new nuclear power stations have been undermined after the French government agreed to a European Commission demand to remove state guarantees.

Environmental groups strongly welcomed the news. Friends of the Earth said the Commission's action was "crucial to developing fairer conditions for renewable energy technologies across the EU". It said that EDF's financing costs for any new nuclear construction programme would increase, and in the lead up to privatisation, EDF would have to open its huge nuclear liabilities to scrutiny by potential investors.

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