Under the Euro Medium Term Note Programme ... - Finance - EDF

Risk Factors
Risks associated with the importance of the EDF Group’s position in the French
electricity market
Although it has seen a decrease in its market share due to market liberalisation, EDF should
remain the largest operator in the French electricity market over the next few years,
particularly with respect to power generation and supply.
The transmission and distribution businesses operated by RTE and Électricité Réseau
Distribution France (ERDF), respectively, are required to be operated in a manner that
ensures they are independent from generation and marketing activities in order to ensure
non-discriminatory access to all users.
Although EDF complies and will continue to strictly comply with the applicable competition
and non-discrimination rules, competitors have initiated and may initiate litigation for noncompliance
with these rules, which could be decided against the EDF Group’s interests.
In addition, the competent authorities or certain governments could, in order to maintain or
enhance competition in certain energy markets, make decisions contrary to the EDF Group’s
economic or financial interests or to its model as an integrated and balanced operator, which
could have a negative impact on the EDF Group’s model, activities and financial results.
In France, for example, a provision of the NOME (New Organisation of Electricity Markets)
law of 7 December 2010, provides for a transition period, until the end of 2025, of regulated
access to electricity generated by existing nuclear capacity (“accès régulé à l’électricité
nucléaire historique” or “ARENH”) for operators supplying end users and network managers
to cover their losses in mainland France. The impact of this measure may be significant for
the businesses and results of EDF.
Other European countries may also claim that the liberalisation of the French market is
insufficient and implement measures intended to slow the EDF Group’s expansion in their
own countries.
Laws and regulations that require transmission and distribution activities to be
managed independently limit control over these activities
In accordance with current laws and regulations, EDF manages its transmission and
distribution networks independently from its generation and supply activities and has
transferred its distribution and transmission activities to wholly-owned subsidiaries. EDF has
been and may be affected by the loss of control over certain strategic and operational
decisions, which may have an impact on the outlook for and profitability of its transmission
and distribution activities in France. At the same time, EDF will continue to bear certain risks
associated with its operations, potential liability to third parties and factors that may affect the
profitability of its assets.
The EDF Group may face similar risks in countries where it owns or manages transmission
or distribution networks and where it is subject to similar regulatory restrictions.
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