Hydroelectric, Nuclear

Suez builds stake in French power market

1 March 2005 – The board of Société Hydro-Electrique du Midi (SHEM) has agreed to Electrabel France taking a 40 per cent stake in the company and has appointed three board members from Suez Group,which owns Electrabel. The move bolsters the position of Suez as a key player on the French electricity market and strengthens the Group objective to acquire 10 per cent of the French electricity market.

In November 2002 Electrabel signed a partnership agreement with Société Nationale des Chemins de fer Français (SNCF), which at that time held 99.6per cent of SHEM. Electrabel also signed a commercial agreement with SHEM at the same time.

Under the partnership agreement, SNCF has an option to sell 80 per cent of SHEM: the first tranche (40 per cent) was sold January 20, 2005, and confirmed by the resetting of SHEM Board, while the second 40 per cent tranche will be sold in 2007. Under the commercial arrangement, since 1 May 2003 Electrabel has been buying and selling the total annual output of SHEM’s power stations, while also directing SHEM’s operations in line with market needs.

SHEM operates 49 hydropower units in the Pyrénées and Massif Central regions of France, with a total installed capacity of 773 MW (peak and hyper-peak generation).

According to the CEO of Electrabel and the COO of SUEZ Jean-Pierre Hansen, “This transaction bolsters our position as a key player on the liberalised energy market in France, complementing our participation in Compagnie Nationale du Rhône (2937 MW of baseload hydropower capacity) and our nuclear generation activities (1100 MW at Chooz and Tricastin). Electrabel’s membership of the SUEZ group was a key factor in this project’s success. It also clearly dovetails with our strategy.”

SUEZ has 6 520 MW, i.e. 7 per cent of the French electricity generation and 32 per cent of the French hydraulic generation capacities. The Group is entitled of : 3 710 MW hydraulic generation capacity with the 19 dams operated on the Rhône by the Compagnie Nationale du Rhône (CNR) and the 49 dams of the Société Hydro Electrique du Midi (SHEM) ; 1 110 MW of nuclear power, with the output reserved in Chooz B and Tricastin plants ; 1 700 MW of cogeneration plants (Elyo).