By Inti Landauro and Sam Schechner 

PARIS -- The French government will lead a EUR4 billion ($4.49 billion) capital increase for state-controlled power utility Electricité de France SA, injecting cash the debt-laden firm needs to embark expensive new projects deemed political priorities.

EDF's board said late Friday that it had approved the capital increase through a "market operation" before the end of the year, adding that it would keep giving shareholders the option of taking their dividends in shares rather than cash as it did this year.

The French government, which owns 85% of the firm, said Friday that it would inject EUR3 billion as part of the share sale, slightly diluting its stake, following through on commitments made last month. In addition, EDF said it plans to sell some EUR10 billion in assets by 2020.

The cash injection and asset sales will help the French utility company address investor concerns that it can't shoulder its EUR37.4 billion in net debt while grappling with slumping energy prices. Investors have worried that EDF won't be able to plow capital into projects like the purchase of a majority stake in beleaguered state-owned nuclear reactor maker Areva NP.

In February, EDF had its credit rating put on review for a downgrade by Moody's Investors Service.

Chief Financial Officer Thomas Piquemal quit last month over concerns that an GBP18 billion ($25.94 billion) plan to build the Hinkley Point nuclear plant in southern England would dangerously stretch the company's finances.

In response, Chief Executive Jean-Bernard Levy said the government would have to inject cash before EDF could commit to moving forward with the Hinkley point plan.

The Hinkley Point project is the centerpiece of a series of business deals between the U.K. and China announced last year, with China General Nuclear Power Corp. agreeing to take a 33.5% stake in it.

Areva is meanwhile a core of the French nuclear industry, though it has lost billions over the past few years on risky investments and on cost overruns on the construction of two reactors in France and Finland.

Write to Inti Landauro at inti.landauro@wsj.com and Sam Schechner at sam.schechner@wsj.com

(END) Dow Jones Newswires

April 22, 2016 16:56 ET (20:56 GMT)