(Boursier.com) — Good Belgian news for Engie. The French energy giant and the Belgian government signed the final agreement on December 13 relating to the extension of the Tihange 3 and Doel 4 nuclear reactors and all obligations linked to nuclear waste. This document confirms and endorses the key principles of the framework agreement signed on July 21, 2023, namely:
– the commitment of both parties to carry out a Flexible Long-Term Operation (“LTO”), for an investment amount estimated between 1.6 and 2 billion euros, and to use their best efforts to restart the Doel 4 and Tihange 3 nuclear units from November 2025;
– the creation of a legal structure dedicated to the two extended nuclear units, owned equally by the Belgian State and Engie;
– the economic model of the extension with a balanced distribution of risks, notably through a Contract for Difference mechanism for remuneration for electricity production. The exercise price will be based on the actual cost of expanding the nuclear units. This cost is not yet known but will be estimated based on the nuclear safety requirements established by the Federal Nuclear Control Agency (AFCN). Thus, an initial price will be set in 2025 and will be updated in 2028 according to the known amount of the final cost of the extension, to cover the period up to 2035;
– the setting of a lump sum for future costs linked to the treatment of nuclear waste, concerning all ENGIE nuclear installations in Belgium, for a total amount of 15 billion euros payable in two installments depending on the categories of waste;
– the lifting of restrictions on Electrabel’s non-European assets.
The impact linked to the increase in Engie’s commitments for the transfer of provisions for nuclear waste on non-recurring net income and on net economic debt have already been noted as of June 30, 2023. Engie confirms that this agreement does not modify not the Group’s medium-term guidance.
The final text also sets the technical and operational conditions prior to a restart of the two units from November 2025, with all nuclear safety guarantees. The operation of these two reactors as well as the dismantling work undertaken on the other units will allow the maintenance of around 4,000 jobs (direct, indirect and induced) and will involve the recruitment of 200 additional employees in the coming months. This agreement remains subject to approval by the European Commission – with which a consultation is underway – as well as to the effective vote on legislative modifications.
Catherine MacGregor, Managing Director of Engie declared: “We are very pleased to announce the definitive signature of this agreement which allows balanced risk sharing for the extension of the two nuclear units and eliminates for the Engie Group the uncertainties concerning the evolution of provisions linked to nuclear waste. Our teams are hard at work to implement the LTOs as quickly as possible, in order to strengthen the security of electricity supply in Belgium.”
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