China investment in French grid would be sensitive issue -RTE chief

NANTES, France, June 17 (Reuters) – A Chinese investment in France’s high-voltage network would be a sensitive issue and utility EDF’s grid unit, RTE, is not in talks with Chinese counterpart China State Grid, as part of a plan to open its capital, RTE’s chief executive said on Thursday.

State Grid Corporation of China (SGCC) has invested in power grids in southern Europe and utilities specialists say the Chinese network giant is looking into all investment opportunities in EU networks.

The French government has asked EDF, which is 85 percent state-owned, to sell up to half of its 100 percent stake in electricity transmission network operator RTE in order to help finance a project to build nuclear reactors in Britain.

Economy Minister Emmanuel Macron has said state-owned bank Caisse des Depots (CDC) might buy a stake in RTE. Under a 2004 law, RTE’s capital must be held by EDF or other public entities.

At a dinner in Nantes, in western France, RTE Chief Executive Francois Brottes said that RTE in theory can only have public shareholders, but pointed out that 15 percent of EDF’s shareholders were private. EDF is the bourse-listed parent of RTE.

Asked if SGCC could take a stake in RTE, Brottes said that as a monopoly operator, RTE is of vital importance for France.

"We are a hyper-strategic company. Therefore, when it comes to issues as sensitive as this, one has to apply a principle of precaution, in the name of national interest," he said.

A possible Chinese investment in RTE would not be just a financial issue, as it concerns vital infrastructure, he added.

Brottes, a former chairman of the France-Taiwan parliamentary friendship group, said SGCC had not shown an interest in investing in RTE.

"The Chinese have not knocked on our door, or if they did I was not there that day," he said.

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In 2012, SGCC bought 25 percent of Portuguese grid operator REN, and it paid 2.1 billion euros in 2014 for a 35 percent stake in Italy’s CDP Reti, which owns large minority stakes in gas transport group Snam and power grid Terna .

"Our friends at Terna clearly are not complaining about their presence, and neither do the Portuguese," Brottes said.

Earlier this month, SGCC was selected preferred bidder for a 14 percent stake in Belgian gas and power distribution firm Eandis, marking its first foray into Western Europe.

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