EDF to extend depreciation period for nuclear plants this year - CEO

The logo of France's state-owned electricity company EDF is seen next to the Electricite de France (EDF) thermal electricity production plant in Cordemais, France, April 21, 2016. REUTERS/Stephane Mahe

PARIS (Reuters) - French utility EDF EDF.PA will extend the depreciation period for its nuclear plants this year, its CEO said in a newspaper interview, an accounting move that will free up cash for costly investment projects in France and Britain.

“By the closing of our first-half results, we will draw the accounting consequences of our intention to extend the lifespan of our existing nuclear plants beyond 40 years,” EDF CEO Jean-Bernard Levy said in Saturday’s Le Figaro newspaper.

EDF had said before it intended to extend the lifespan of its French nuclear plants to 50 or 60 years, beyond the 40 years they were initially built for. Energy Minister Segolene Royal said in February that the government was willing to give the go-ahead for such a move.

But French nuclear watchdog ASN is the only authority allowed to grant such an extension, and it has said a decision on the matter would not come before 2018-2019.

To make the accounting change, which would automatically boost EDF’s profits, the company must convince its auditors that there is a good chance of the extension being granted.

In 2003, EDF extended the depreciation schedule for nuclear reactors in its accounts to 40 years from 30 years - six years before the ASN agreed to the move.

The utility, 85 percent-owned by the French government, said on Friday it would seek to raise 4 billion euros ($4.5 billion), amid concerns that a 23 billion euro nuclear plant project at Hinkley Point in Britain would put a strain on its finances.

Reporting by Michel Rose; Editing by Toby Chopra and Hugh Lawson