The European Commission (EC) has approved French government's plan to inject €4.5bn ($4.8bn) in the troubled nuclear engineering firm Areva.
The Commission has concluded that the France's capital infusion is in line with EU state aid rules.
The payment of the state aid, however, is subject to positive results of the ongoing tests being conducted by the French Nuclear Safety Agency on the Areva-designed reactor vessel for EDF’s Flamanville III nuclear power plant in France.
It is also subject to approval of the divestment of Areva's reactor business in accordance with the EU merger rules.
European Commissioner responsible for competition policy Margrethe Vestager said: “Today’s decision paves the way for a viable future for Areva based on a sustainable restructuring plan.
“The plan strikes the right balance between improving the group’s competitiveness and limiting distortions of competition created by the public financing.”
In April 2016, EC was notified by France of a restructuring plan for various divestments, particularly the Areva’s nuclear reactor business in order to restore the group’s competitiveness.
Areva will shift its focus on operations on thr nuclear fuel cycle, i.e. the upstream and downstream activities and services in the production of electricity from uranium in nuclear reactors.
To support Areva in restructuring its business, France plans to provide public capital of €4.5 to help the company bear the costs.
The EC noted that the divestment of Areva’s reactor business will allow the group to focus on a clear and profitable business in the nuclear fuel cycle.