EDF says may need partners for nuclear newbuild in France

PARIS, Oct (HKSE: 3366-OL.HK - news) 23 (Reuters) - EDF (Paris: FR0010242511 - news) may need partners to finance the future replacement of its nuclear fleet in France, the chief executive of the state-controlled utility said on Friday.

Jean-Bernard Levy said EDF and Areva (Paris: FR0011027143 - news) are working on an updated design for Areva's EPR reactor, the EPR New Model, which should be ready by around 2020, and added he expects France will eventually build some 30 EPR reactors.

But he said he is not sure EDF's finances will allow it to build a new fleet entirely on its own.

"Given the current state of our balance sheet, I am not sure we can replace our entire fleet and keep a 100 percent ownership stake," he said, adding fellow French utility Engie (Brussels: ENGI.BR - news) had shown interest in investing in nuclear energy in France.

Engie (Other OTC: ENGIY - news) has no nuclear assets in France but operates seven reactors in Belgium and is part of a consortium to build two Areva-designed reactors in Turkey.

Levy said EDF's 18 billion pound project to build two nuclear reactors in Hinkley Point, Britain, would be financed fully on the balance sheets of EDF and its Chinese partner CGN.

"We will draw on the first 2 billion pounds of financing provided by the UK and will decide later whether we will keep that line or refinance it on our balance sheets," he said.

He added that EDF would keep looking for a third partner to take about 15 percent in the project in order to reduce the stress on its balance sheet.

"We will keep a majority, but 51 percent would be better than 66.5 percent," he said.

Ratings agency Standard (Other OTC: SNDH - news) and Poor's warned on Thursday it may lower EDF's credit rating if it presses ahead with Hinkley Point. EDF plans to take a final investment decision in coming weeks.

Levy declined to comment on why Chinese nuclear group CNNC - which was part of the Hinkley Point consortium two years ago - had dropped out.

Levy said in Italy there could be some consolidation around EDF, which is a distant second to Italian utility Enel (Swiss: ENEL.SW - news) but much larger than the number three and four players. (Reporting by Geert De Clercq; Editing by Mark Potter)