French government is set to fully nationalize the currently 84% state owned nuclear energy company EDF, at a time when the company is expecting a massive downturn in profits. The energy company has already warned investors that its core profits would take a significant hit this year. It anticipates a loss of €29 billion. The massive loss is caused by a series of events that have led to more than half of EDF’s 56 rectors to be taken offline.

France’s nuclear sector has been hit with multiple issues, including a pileup of delays and stoppages caused by the pandemic, several maintenance issues including corrosion at some of the country’s aging reactors, troubles at EDF and a years-long absence of significant new nuclear investment. To make matters worse, a severe drought has caused rivers around Europe to dry, leaving some French and Swiss nuclear plants without enough water to keep the reactors cool.

As a result of all those developments, France’s nuclear generation has dropped to an all time low. This is a major problem for the nation, as it generates around 70% of its power from nuclear. Moreover, France, which used to be a net exporter of energy thanks to its robust and reliable nuclear sector, is being forced to import energy in a historically tight market.

Europe’s energy crisis deepens as Moscow cuts off gas flows in the wake of its invasion of Ukraine and the subsequent Western sanctions. The EU has been working toward weaning itself off of its heavy reliance on Russian fossil fuels with the intention of instituting energy sanctions on the Kremlin.

Because of political conflict with Russia, France’s nuclear woes have become all the more concerning. France has long been one of the pioneers of nuclear energy generation, with the highest production rates per capita. France was not tied in any substantive way to the dangerous reliance on Russian gas imports that made the continent’s energy security so fragile. In fact, it has prided itself on the energy independence that nuclear built. But now, just when it was most needed, French nuclear has failed to save the day.

Under these circumstances, the French government is preparing to make a bid to fully own EDF in order to make the situation better. In the coming weeks, it is expected to launch a tender offer for the remaining 16% of the company it doesn’t own so it can unilaterally make decisions pertaining to building new reactors and addressing the myriad issues with the existing fleet.

EDF has said that it expects to have its reactors back up by early next year. In order to do so, the already heavily indebted company will have to take on a whole lot more debt at a time when it is already under scrutiny for operational errors and oversights.