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Government welcomes completion of British Energy sale

DEPARTMENT OF ENERGY AND CLIMATE CHANGE News Release (2009/001) issued by COI News Distribution Service. 5 January 2009

The Government has welcomed the completion today of EDF's £12.5 billion purchase of British Energy Group plc. The purchase is a significant step in EDF's plans to build four new nuclear reactors in the UK

Completion today, following regulatory clearance with conditions by European competition authorities in December, marks the culmination of the restructuring of British Energy. In 2002 the Government stepped in to support a restructuring of the company in order to ensure the safety of nuclear power and security of electricity supplies. Since then, the challenge to tackle climate change has made the growth of new nuclear power more pressing and this transaction enables the UK to move further towards its ambition to become a low carbon economy.

Energy and Climate Change Secretary Ed Miliband said:

"Given the challenge of climate change and energy security, it is right to embrace nuclear power as one of the technologies that can serve us in the future. Today's announcement marks an important step on the path to new nuclear power becoming a reality, just a year after we published the Nuclear Energy White Paper.

"In addition to the important investment made by EDF, our ambition is to have more than one firm building and operating nuclear power stations in the UK. There are strong signals of interest in this from the power industry and we will continue to work with stakeholders to bring about the conditions that can make that possible."

Business Secretary Lord Mandelson said:

"Completion of this takeover represents not only a £12.5 billion investment in the UK by EDF but, in opening the way for new nuclear build, should provide many billions of pounds more opportunity for the UK supply chain."

The sale, which includes the 36 per cent stake in the company held by the Government's Nuclear Liabilities Fund, raises approximately £4.4 billion towards the cost of decommissioning British Energy's existing nuclear power stations. EDF's takeover offer was announced on September 24.

Notes to Editors

1. British Energy is the UK's largest electricity generator employing over 6,000 people. It currently owns and operates eight nuclear power stations in the UK at Dungeness, Hartlepool, Heysham, Hinkley Point, Hunterston, Torness and Sizewell. It also owns and operates the Eggborough coal-fired power station in Yorkshire.

2. EDF is France's historical electricity operator and has a strong position in Germany, the UK and Italy. It supplies gas, electricity and associated services to more than 38 million customer accounts worldwide including more than 28 million in France and 5.5 million in the UK.

EDF has committed to the European competition authorities to: divest British Energy's coal fired power station at Eggborough; divest EDF Energy plc's gas fired power station at Sutton Bridge; sell in GB amounts of electricity ranging from 5 to 10 TWh per year, during the period from 2012 to 2015; and give up one of the combined group's three grid connection agreements at Hinkley Point.

EDF has also committed to divest, without conditions, one site potentially suitable for the construction and operation of new electricity production facilities situated adjacent to existing British Energy stations at either Heysham or Dungeness, at the option of the purchaser. This latter commitment is in addition to the existing conditional commitments to sell land at Wylfa and Bradwell.

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