PARIS—State-controlled power utility É lectricité de France SA Thursday again delayed the startup of its new nuclear reactor in northwestern France to the end of 2018.

The company also raised the estimated cost of construction of the reactor, being built in the town of Flamanville, to €10.5 billion ($11.8 billion), three times the original estimated price tag, and €2.5 billion higher than the previous estimate, EDF's Chief Executive Jean-Bernard Levy said Thursday.

The announcement is the latest in a string of setbacks for the project and Areva SA, the government-controlled company that is building the reactor. The reactor was originally meant to start operating in 2012 and cost €3.3 billion.

EDF shares fell 4.2% in midday European trading, while Areva shares were down 0.1%.

In April, the French nuclear regulator had said it had discovered flawed steel in a crucial part of reactor, forcing Areva to carry out more tests, the results of which are expected in October.

There have already been a series of incidents at Flamanville, which is a new European Pressurized Reactor, leading the two companies to delay its completion to 2017.

The delays and cost overruns, the first reactor to be built in France in more than 15 years, contributed to Areva's poor performance. The French government, which controls more than 85% in both Areva and EDF, has pushed for the latter to take over the former's nuclear reactor division one month ago.

Areva is working on a similar reactor project in Finland, which is several years behind schedule. The company is also planning to build two EPR nuclear reactors in the U.K. though a final investment decision has yet l to be made. The new delay at Flamanville doesn't change the situation, Mr. Levy said.

EDF's Chief Financial Officer Thierry Piquemal said the company maintains its goal to post a positive free cash flow after dividend in 2018 despite the Flamanville cost increases.

Write to Inti Landauro at inti.landauro@wsj.com

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(END) Dow Jones Newswires

September 03, 2015 11:35 ET (15:35 GMT)