UPDATE 1-France pledges to help EDF make Hinkley Point happen

(Previously PARIS, adds minister comments, background)

CIVAUX, France, March 17 (Reuters) - The French government wants state-controlled utility EDF to push ahead with a UK nuclear reactor project at Hinkley Point and is ready to give it the financial support it needs, Economy Minister Emmanuel Macron said on Thursday.

The state could agree to take the dividend on its 85 percent EDF stake in shares instead of cash in the coming years, while EDF-owned electricity grid operator RTE could open its capital to the public sector and other partners, the minister said.

“If you believe in nuclear, you cannot say that you will not participate in the biggest nuclear project in the world,” Macron told EDF staff during a visit to EDF’s nuclear plant at Civaux, in mid-western France, which accounts for 5 percent of French nuclear production.

“Not doing Hinkley Point would be a mistake.”

While EDF is profitable, its heavy investments are weighing on cash flow and it has had to borrow billions of euros in recent years just to pay dividends, pushing net debt to over 37 billion euros, more than twice its market value.

EDF will also need to find billions to bail out another state company - nuclear engineering firm Areva - by taking over its reactor unit and 50 billion euros to finance the renewal of its fleet of reactors.

The CGT union used Macron’s visit to renew calls to delay the 18 billion pound ($25.7 billion) Hinkley Point project in southwest England, saying it would “jeopardise the company”. Pickets jeered the minister as he arrived for his visit.

EDF Chief Executive Jean-Bernard Levy warned last week that he would not go ahead with the project without additional financial support from the French state.

Macron told Reuters on Thursday there were several ways the state could help, including a repeat of its deal to accept dividend rights in shares instead of cash this year.

“We have done it for this year and we will look at doing it in the coming years,” he said.

The minister told reporters the government would decide on strategy and financial assistance for EDF by May, with a capital increase among the options.

Levy added that EDF was working on the financing strategy.

“We need to define how to operate in a world where power prices have fallen by a third in a few months,” he said.

Asked if EDF would make a decision on Hinkley Point before its annual shareholder meeting in mid-May, he would only say that a decision would be taken soon.

The project was first announced in October 2013, but a final investment decision has been delayed as EDF struggled to find partners and financing. Chinese utility CGN signed up for a one-third stake in Oct. 2015, leaving EDF to fund the rest. ($1 = 0.6997 pounds) ($1 = 0.8824 euros) (Writing by James Regan; Editing by Andrew Callus and David Evans)


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