EDF : EDF : Agreement on the repayment of the CSPE deficit

          EDF : EDF : Agreement on the repayment of the CSPE deficit

Agreement on the repayment of the CSPE deficit

EDF and the French  State have reached an  agreement whereby EDF will  receive 
full compensation for having borne the cumulated financial deficits related to
the Contribution  to Electricity  Public Services  (CSPE) mechanism  over  the 

The CSPE was designed as a tax levied on electricity end-customers' bills. Its
level is set  by the State  and its  purpose is to  enable French  electricity 
incumbent players,  like  EDF,  to  recover  the  extra  charges  incurred  in 
performing their  mandatory  public service  assignments.  As such,  the  CSPE 
contributes to the financing of the development of renewable power generation,
of the  social  electricity tariffs  and  of the  nationwide  equalization  of 
electricity tariffs. Since  2007, the level  set for the  CSPE collection  has 
been insufficient to compensate for the increase in the charges. This resulted
in the accumulation of a CSPE deficit, borne by EDF only, which weighs on  the 
group indebtedness.

The agreement found between  EDF and the French  authorities will provide  the 
reimbursement by the French State of  the receivable made of the CSPE  deficit 
as of 31 December  2012 of c.  €4.3 billion^(1) and  of the cumulated  implied 
financing costs of this deficit of c. €0.6 billion. This receivable of c. €4.9
billion will be staggered  according to a gradual  schedule and will be  fully 
repaid by 31 December 2018. The  outstanding receivable will bear interest  at 
market rates.

Following the  above-mentioned agreement,  EDF will  account for  a  financial 
income of c.€0.6  billion stemming from  the recognition of  repayment of  the 
historic CSPE deficit financing costs as of 31 December 2012^(2).

Discussions between EDF and the French  State continue in order to relief  the 
Group net financial debt, on which the CSPE deficit currently weighs.

(1) The  final receivable  amount will  be confirmed  later in  2013 when  the 
French energy regulator (CRE) will validate the actual CSPE deficit for 2012.
(2) The detailed accounting  impacts of the agreement  will be published  with 
EDF's 2012 financial results on 14 February 2013

EDF: solution to CSPE


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Source: EDF via Thomson Reuters ONE
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