On 23 November 2021, EDF launched a Euro-denominated senior Green Bond issue maturing on 29 November 2033, for a total nominal amount of €1.75 billion with a fixed 1% coupon (see note 33 (1)).
An amount equal to the net proceeds of the bonds will be directly or indirectly allocated to the financing and/or refinancing of new or existing Eligible Projects as defined in EDF’s Green Bond Framework (1).
Settlement took place on 29 November 2021, on which date the bonds were admitted to trading on the regulated market of Euronext Paris.
This issue was complemented by a further issue launched on 6 December 2021 for a total nominal amount of €100 million with the same coupon and maturity as the initial issue of 23 November 2021, and was fungible with the initial issue 40 days after the issue date (see note 33 (1)).
On 24 December 2021 EDF announced the syndication of a new €1.5 billion revolving creditfacility with an initial maturity of three years, the cost of which will be indexed on four of the Group’s ESG KPIs, with a particular focus on its social responsibility.
This new credit line, in which nine full-service European and North American banks are participating, reaffirms the central role of sustainable finance tools in EDF’s financing strategy. Bank of America and Natixis acted as ESG Coordinators, Crédit Agricole Corporate & Investment Bank as documentation agent and facility agent and Société Générale as syndication agent. Bank of America, BNP Paribas, Crédit Agricole Corporate & Investment Bank, Natixis, Société Générale and Wells Fargo also acted as Lead Arrangers and Bookrunners.
EDF is continuing its commitment to responsible finance, with €9.3 billion of ESG indexed credit facilities (more than 75% of all its credit lines) at the end of 2021, and the ambition of reaching 100% in the years to come. Through this approach, which is aligned with its raison d’être, EDF is able to strengthen its dedication to innovative financing solutions and incorporate the Group’s CSR commitments.
The indicators used for the syndicated credit facility relate to four areas of EDF’s fair and inclusive transition principles in favour of all stakeholders:
This new ESG-indexed credit line complements the range of sustainable finance tools that EDF has been developing for several years, particularly in the green and now social bond market, where the Group has established itself as a benchmark issuer with the equivalent of €10 billion issued since 2013.
The economic disruption caused by the Covid-19 pandemic in 2020 had significant repercussions for many of EDF’s activities in 2020, particularly nuclear power, worksites and services.
For the half-yearly closing at 30 June 2020, then the annual closing at 31 December 2020, in-depth analyses were conducted in EDF’s entities to prepare reliable estimates of the impacts of the pandemic on its financial statements, based on specific reporting and valuation principles explained in the 2020 half year financial statements (see note 2.1) and 2020 annual financial statements (see note 2.1).
The impact of the Covid-19 pandemic on EDF’s operating profit was estimated at €(862) million at 31 December 2020, reflecting the lower nuclear power output, a decrease in demand, and recognition of impairment on trade receivables.
Even though the Covid-19 pandemic continued to have effects during 2021, its impacts on operating profit at 31 December 2021 are not very significant, diffuse and not easily traceable.
Analyses conducted to estimate credit losses on trade receivables at 31 December 2020 led to a €85 million increase to impairment of trade receivables for 2020 resulting from the pandemic, calculated under the principles presented in note 2.1.2 to the financial statements at 31 December 2020.
The risk analyses were updated at 31 December 2021 in view of the recovery levels observed over the year, and this led to recovery of a total €34 million from impairment of trade receivables (see note 11.2 (2)).
The principal regulatory changes in 2021 are presented below. Changes in 2022 are presented in note 41.
In accordance with Article L. 337-4 of the French Energy Code, regulated electricity sales tariffs are set by the Ministers for Energy and the Economy following proposals by the French Energy Regulatory Commission (Commission de régulation de l’énergie or CRE).
France’s Council of State ruled in decisions of 18 May and 3 October 2018 that the principle of regulated electricity sales tariffs is compatible with European Union law when such tariffs serve the general economic interest objective of guaranteeing consumers an electricity price that is more stable than market prices.
In accordance with European Directive 2019/944 of 5 June 2019 on common rules for the internal market for electricity, the French Energy and Climate law of 8 November 2019 authorises continuation of regulated sales tariffs, but they are reserved for residential or business consumers with a subscribed power level of up to 36kVA, provided they have fewer than 10 employees and their annual sales, income or balance sheet total is below €2 million.
In accordance with Article L. 337-4 of the French Energy Code, the French Energy Regulatory Commission “CRE” (Commission de régulation de l’énergie) is responsible for sending the Ministers for the Economy and Energy its reasoned proposals for regulated sales tariffs for electricity. If no objections are made within three months, the proposals are deemed to have been approved.
In a decision of 14 January 2021, the CRE proposed an increase of 1.61% including taxes (1.93% excluding taxes) in the “blue” tariffs for residential customers and 2.61% including taxes (3.23% excluding taxes) in the “blue” tariffs for non-residential customers from 1 February 2021. This proposed increase takes particular account of the rising cost of energy supplies and capacity guarantees, the “catch-up” adjustment to cover the cost-income differential on regulated sales tariffs in 2019 and 2020, movements in selling costs associated with unpaid receivable forecasts for 2021, particularly in the context of the Covid-19 pandemic, and adjustment of selling costs for non-residential customers who are still eligible for the regulated tariffs. This CRE proposal was confirmed by tariff decisions of 28 January 2021 that were published in the Journal officiel of 31 January 2021, and has applied since 1 February 2021.
(1) This Framework and its independent review by Vigeo Eiris are available in the “Sustainable Finance” of the Company’s website ( www.edf.fr).
