EDF gets green light to invest in US nuclear

French energy company EDF and Constellation Energy, a Baltimore, Maryland-based power generator, have received regulatory approval for a nuclear joint venture announced in January.

EDF and Constellation received the go-ahead today from the Maryland Public Service Commission (MPSC) for a joint venture that would see the French firm acquire a 49.99% stake in Constellation’s nuclear generation and operation business for $4.5 billion.

Announced in January, the deal also involved an immediate cash injection of $1 billion and a $600 million interim backstop liquidity facility. Constellation also signed up for the option to sell up to $2 billion of non-nuclear generation assets to EDF in the future.

EDF’s 49.99% interest has been structured as a joint venture with Constellation and will be operated in addition to an existing nuclear project launched by both companies in 2005, called UniStar.

Approval from the Maryland PSC completes the regulatory review process for the new joint venture, and the companies have now received all necessary approvals at the federal and state levels to proceed with the transaction.

According to a statement from EDF, it will use its investment in Constellation Energy’s nuclear business as a starting point for its US growth efforts. Under the terms and conditions of the nuclear joint venture, EDF will move its US headquarters to Maryland.

Pierre Gadonneix, chairman and chief executive officer of EDF, says: “EDF looks forward to operating and developing nuclear power plants in the US, where the group is already active in the development of renewable energy (enXco, a subsidiary of EDF Energies Nouvelles), trading (EDF Trading North America), and the nuclear renaissance (via Unistar Nuclear Energy).”

Constellation Energy released the following statement today regarding the MPSC’s decision: "We are now moving to close the transaction as quickly as possible so that we can begin to deliver the many benefits of this investment to all stakeholders across the state.”