EDF / 2018 Reference document

FINANCIAL STATEMENTS Significant change in the financial or trading position

6.7

SIGNIFICANT CHANGE IN THE FINANCIAL

OR TRADING POSITION

Significant events occurring between the last day of the 2018 fiscal year and the before 14 February 2019, when the Board of Directors approved the financial date of the filing of this Reference Document are mentioned in note 50 to the statements and, for events after 14 February 2019, in section 5.2 “Subsequent consolidated financial statements of the year ended 31 December 2018 for events events” of this Reference Document.

6.8

INFORMATION RELATING TO THE ALLOCATION OF FUNDS RAISED THROUGH GREEN BONDS ISSUED BY EDF

Since 2013 the Group has conducted four Green Bond issues for a total of around €4.5 billion in order to support its development in renewable energies. After two bond issues chiefly meant to finance the building of new wind and solar projects by its subsidiary EDF Renewables (€1.4 billion in November 2013 and $1.25 billion in October 2015), the Group expanded its Green Bond Framework to finance investments in the renovation and modernisation of its hydropower assets in mainland France. The new Framework was first applied to a €1.75 billion issue in October 2016 and then to a 26 billion yen issue in two tranches in January 2017. The commitments made by EDF in the context of these two bond issues follow the four Green Bond Principles (1) guiding (i) the use of proceeds, (ii) existing processes for evaluating and selecting eligible projects, (iii) the management of proceeds, and (iv) reporting procedures. A detailed description of these investments can be found in the EDF Green Bond Framework of September 2016 available on the Green Bonds page of the Company's website. This section provides a summary of these commitments and how EDF has fulfilled them as at the end of 2018. USE OF PROCEEDS EDF has committed itself to allocate the proceeds from its Green Bonds programme to fund new investments in renewable energy projects. Projects eligible (2) for Green Bond financing (“Eligible Projects”) are: projects built by EDF Renewables to generate electricity from renewable sources; ■ investments in existing hydropower facilities in mainland France within the ■ following categories: renovation and heavy maintenance, modernisation and automation, and works on existing plants (including, in particular, capacity increases). There are no plans to use the funds raised to refinance existing projects or acquire operational businesses or facilities. EVALUATION AND SELECTION OF ELIGIBLE PROJECTS FINANCED Each Eligible Project to be funded is assessed against the environmental and social eligibility criteria (3) (“E&S criteria”) specific to EDF Renewables' investments, on the one hand, and to hydroelectric investments, on the other, by the Financial Department of EDF Renewables and the Financial Department of EDF Hydro, respectively. Assessments are based on information provided by the teams in charge of development, purchasing and sustainable development matters.

Only projects meeting the E&S criteria qualify for Green Bond financing. Those projects over which EDF Renewables has direct control are financed as a priority. The entire project assessment process is documented so as to be able to show an independent auditor that projects financed meet the eligibility criteria. On this basis, the Finance Departments of EDF Renewables and EDF Hydro select which Eligible Projects are financed. MANAGEMENT OF PROCEEDS Funds raised are managed according to a strict ring-fencing principle in order to ensure that their use is exclusively and effectively reserved for financing Eligible Projects. Once received by EDF SA's Finance and Investment Department, proceeds from each bond issue are invested and tracked in a dedicated sub-portfolio of treasury assets until allocated to Eligible Projects. Proceeds are invested in priority in treasury assets identified as Socially Responsible Investments (SRI). The finance departments of EDF Renewables and EDF Hydro notify EDF's Treasury Department, on an ongoing basis or at regular intervals, of the funds needed to cover investments related to the projects selected. Based on this information the Treasury Department adjusts the amounts available in the dedicated treasury asset sub-portfolios. EDF aims to allocate the entirety of funds raised within 24 months of a bond issue.

6.

REPORTING Effective use of funds

All the funds raised in November 2013 under the first Green Bond issued by EDF for €1.4 billion were allocated by June 2015. All the funds raised in October 2015 under the second Green Bond issued for $1.25 billion were allocated by the end of 2017. Of the €1,750 million raised in October 2016 under the third Green Bond issued by EDF, €1,188 million were allocated to Eligible Projects as at 31 December 2018. The funds raised in January 2017 in the context of the fourth Green Bond issued by EDF (JPY 26 billion in two tranches) have not yet been allocated. The balance of funds raised under the Green Bonds issued in October 2016 and January 2017 was invested in a dedicated treasury asset portfolio, as indicated above, where it will remain until allocated to Eligible Projects.

The Green Bond Principles, updated in June 2018, are voluntary guidelines for issuance of green bonds. They recommend transparency and disclosure and promote integrity to (1) support development of the green bond market. For more information, see http://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/green-bonds/green-bond-principles.

Only projects from category (i) are eligible for financing using funds raised by the bond issues of November 2013 and October 2015. (2) The E&S criteria for each project type are presented in the appendix to the EDF Green Bond Framework of September 2016. (3)

495

EDF I Reference Document 2018