France needs to spend about 100 billion euros ($104 billion) to strengthen and expand its power grid by 2040 to cope with growing power demand and new nuclear reactors, national grid operator RTE said on Thursday. The initiative is designed to support the French government's strategic goal of making the country a European hub for artificial intelligence.

The French government recently announced that companies have committed to invest about 109 billion euros in infrastructure such as data centers. In its report, RTE pointed out that to meet the electricity demand of these new facilities, the construction of the French grid will need to undergo a massive upgrade. However, France's fiscal deficit is now one of the largest in the European Union, raising concerns about the source of funding.

Thomas Veyrenc, RTE's chief executive officer for economics, strategy and finance, said in a press release: "The first point in terms of financing is that RTE is a public monopoly... It can be financed at low cost. We can finance ourselves by borrowing in the bond market." "It is important for our rating agencies and others to verify that we can execute our grid construction plan correctly," he added.

RTE said more than half of the €100bn investment will be used to meet new needs such as data centres, charging stations for electric vehicles and connecting low-carbon power sources such as nuclear and renewables. According to the report, France is currently in a "paradoxical situation", with a large number of projects in the planning process, but less than 15% of them have been confirmed and formally requested to start grid construction.In the next five years, the annual rate of investment in the construction of the French grid needs to more than triple from €2.3 billion in 2024 to €7.5 billion. Still, the figure is lower than that planned by neighboring Germany. France plans to build six new nuclear reactors, which are expected to power future electrification. More than 140 low-carbon or digital projects have signed contracts to connect to the grid, with a total capacity of 21 gigawatts (GW), more than double the current electricity consumption of these sectors, according to RTE. Editor/Xu Shengpeng