France to Reimburse EDF’s Green Energy Costs

January 14, 2013 by  
Filed under Green Energy News

The French government has agreed to pay state-controlled power utility Electricite de France SA (EDF.FR) 4.9 billion euros ($6.57 billion) by the end of 2018 to reimburse costs related to the acquisition of electricity generated by renewable sources and subsidies for electricity sold to the poor, the company said Monday.

In 2003, the French government started to levy a special tax on the bills of electricity consumers to finance EDF’s spending on the development of renewable power generation as well as cuts to electricity tariffs for the poor and consumers in remote areas, EDF said Monday. Since 2007, the level of the tax hasn’t kept up with the increase in charges, the company added in a statement.

The government has agreed to reimburse the cumulated deficits EDF has incurred, which are estimated to total around EUR4.3 billion. EDF estimates the cost of financing the deficits will be EUR600 million.

The reimbursement from the government will be accounted for by EDF as financial income of about EUR600 million.

-Write to Inti Landauro at inti.landauro@dowjones.com

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