GDF Suez says Areva guaranteed reactor project in Turkey, turbine in France

PARIS-Reuters

AFP Photo

French utility GDF Suez said it received guarantees from Areva about nuclear reactors in Turkey as well as wind turbines in France that it plans to build with the nuclear group.

Areva, which is struggling with its debt pile and a dearth of orders, agreed in May 2013 to supply four nuclear reactors of a new type to a Japanese-led consortium including GDF Suez that plans to build Turkey’s second nuclear power plant at an estimated cost of $22 billion.

Areva also signed a deal with GDF Suez in May 2014 to develop an 8 megawatt wind turbine for a 4 billion euro project to build two wind farms off the French coast.

A string of profit warnings and a debt rating cut to non-investment grade late last year have led to concerns Areva may not have the capital needed to develop the new “Atmea” reactor while it still struggles with billion-euro cost overruns and multi-year delays relating to its “EPR” model.

The 8 MW turbine, which would be one of the largest in the world, will also require heavy capital investment, for which Areva has signed a joint venture with Spain’s Gamesa.

Areva’s new management is set to announce a fresh strategy and debt reduction plan on March 4.
“We do not want this reorganization to get in the way of Areva delivering those reactors,” GDF Suez Chief Executive Gerard Mestrallet told reporters on Thursday. “Areva’s new leadership is aware of this and has given us guarantees.”

He said Areva had also given assurances about its ability to deliver the new wind turbines.