Shortly after its announcement of the new £18 billion nuclear build in the UK, Hinkley Point C, French-based company Électricité de France (EDF) was downgraded from ‘A’ to ‘A-’. S&P’s Director of Utilities, Pierre Georges, elaborates on the downgrade in an article for Energy Voice.
In the article, Georges notes that falling energy prices in France, weak cash flow and a reliance on revenues derived from an increasingly unregulated energy market – producing less predictable energy prices – have created a less stable environment for EDF. He explains that in the face of such headwinds, S&P believes the company faces increased execution and contingency risks.
However, he writes that EDF has been given a ‘stable’ outlook, as a result of the company’s ‘remedy plan’, designed to relieve debt over the next two years in cooperation with the French government. In addition, the company’s large size, low carbon-generating nuclear fleet and future incomes from a recent sale of 35% of stakes are expected to remain key strengths in regards to the company’s credit quality.
The full article can be read here.