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

Risk Factors
advantage. The EDF Group also plays an active role in construction projects for new nuclear
plants in France, the United Kingdom, China and potentially in other countries. Any event
that has a negative effect on the nuclear business is likely to have greater consequences for
the EDF Group’s image, activities, productivity, financial position and results than for its
competitors that generate proportionally less electricity using this source of energy.
Due to its nuclear activities, the EDF Group is exposed to substantial liability risks
and potentially significant additional operating costs.
Although the EDF Group has adopted risk control strategies and procedures for its nuclear
activities that are consistent with high standards, such activities, by their nature, still present
potential risks. Therefore, the EDF Group may face significant liability as a result of inter alia
incidents and accidents, security breaches, malicious or terrorist acts, aircraft crashes,
natural disasters (such as floods or earthquakes), equipment malfunctions or problems in the
course of storing, handling, transporting, processing or packaging nuclear substances and
materials. Such events could lead to significantly tougher operating requirements for nuclear
plants, or the partial or total closure of the operation of the EDF Group’s power generation
plants, and may have serious consequences, especially in the event of radioactive
contamination or irradiation of persons working for the EDF Group, the general population
and the environment, as well as a material, negative impact on the EDF Group’s activities,
strategy, outlook and financial position.
A nuclear operator is responsible for the nuclear safety of its facilities. The liability scheme
that applies to European nuclear facility operators is based on the principle of the operator’s
strict liability. Accordingly, if an event occurs that causes damage, the EDF Group would be
automatically liable up to a monetary maximum set by the law applicable in the country
where the event occurs, regardless of the source of the event that caused the damage and
any safety measures that may have been taken.
The EDF Group cannot guarantee that in countries where it operates nuclear facilities the
maximum liability set by law will not be increased or cancelled. For example, the protocols
amending the Paris Convention and the Brussels Convention, which are currently being
ratified, provide for these maximum amounts to be increased. The entry into force of these
amending protocols or any other reform that seeks to increase the maximum liability of
nuclear plant operators could have a significant impact on the cost of insurance, which the
company is not currently in a position to estimate. Furthermore, the EDF Group cannot
guarantee that insurance covering this liability will always be available or that it will always be
able to maintain such insurance.
Property damage to EDF’s nuclear facilities is covered by insurance programmes. Despite
this coverage, any event that would cause significant damages to an EDF Group’s nuclear
facility could have a negative impact on the EDF Group’s business, financial results and
financial position.
Lastly, the EDF Group cannot guarantee that the insurers that cover both its liability as a
nuclear plant operator and property damage to its facilities will always have available
capacity or that the costs of cover will not significantly increase, particularly in light of the
impacts on the insurance market of events such as the nuclear accident in Japan that
occurred on 11 March 2011.
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