EDF_REGISTRATION_DOCUMENT_2017

RISK FACTORS AND CONTROL FRAMEWORK Risks to which the Group is exposed

The amount of dedicated assets in France allocated by the Group to cover the costs of its long-term nuclear business commitments (radioactive waste and decommissioning) might need to be revised upwards and require additional expenditures. In France, as of 31 December 2017, the market value of EDF’s portfolio of dedicated assets was €28.1 billion, compared to €25.7 billion on 31 December 2016 (see sections 1.4.1.1.7 “Assets available to cover long-term nuclear-related commitments outside the operating cycle” and 1.5.6.2.2 “Specific regulations applicable to basic nuclear facilities” and note 47.3 to the consolidated financial statements for the financial year ended 31 December 2017). In the event of a significant change in the provisions determining the reference base of the dedicated assets, it might prove necessary to make additional allocations to adjust the value of these assets, which could have a material adverse impact on EDF’s financial position. Moreover, stricter regulations at the national level (in particular those that impact the base for determining the dedicated assets to be constituted by EDF) or European level may lead to more stringent requirements regarding the constitution of dedicated assets and have a significant impact on EDF’s financial position. Lastly, although these assets are constituted and managed in accordance with strict prudential rules, the Group cannot guarantee that price fluctuations in the financial markets or changes in valuation will not have a material adverse impact on the value of these assets (see section 5.1.6.1.6 “Management of financial risk on EDF’s dedicated asset portfolio” for a sensitivity analysis), which could require EDF to allocate additional amounts to restore the value of these assets; such events could have a material adverse effect on the Group’s financial position.

the Economy and the Energy Ministry whose conclusions had been made public in January 2016 by the aforementioned authority. The annual review carried out in 2017 did not lead to any significant adjustment of the provision. With regards to the provision for decommissioning the nuclear electricity generation fleet in France, the costs at year-end economic conditions are evaluated at €27,035 million and the corresponding provision is €14,920 million. As for the last core provision, costs based on year-end economic conditions are estimated at €4,332 million and provision at present value amounts are valued €2,387 million, as the discounting effect is very significant due to distant waste storage maturities. Note 29.1.5.2 “Analyses of sensitivity to macro-economic assumptions” to the consolidated financial statements for the fiscal year ended on 31 December 2017 indicates the analyses of sensitivity of provisions and Group’s results to a discount rate change, for the different types of provisions. The provisions of Framatome and SOCODEI in relation to the basic nuclear facilities in France stand respectively at €81 million and €43 million (see note 30 “other provisions for decommissioning” to the consolidated financial statements for the fiscal year ended 31 December 2017). In the United Kingdom, under the agreements concluded in connection with the restructuring of British Energy, the costs of decommissioning EDF Energy Nuclear Generation Group Ltd.’s existing nuclear power plants will be paid by the Nuclear Liabilities Fund. If the assets of this Fund prove insufficient, these costs will be borne by the UK Government (see section 1.4.5.1.2.1 “Nuclear Generation”). For nuclear power plants which EDF does not operate, but has financial interests (United States, Belgium, Switzerland), the Group is exposed financially in proportion to its participation to contribute to future decommissioning costs.

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EDF I Reference Document 2017