Obligation EnBW Energie BW 1.625% ( XS2035564629 ) en EUR

EnBW Energie BW

100 % ▲

Allemagne

XS2035564629 ( en EUR )

1.625% par an ( paiement annuel )

05/08/2079

Prospectus brochure de l'obligation EnBW Energie Baden-Wuerttemberg XS2035564629 en EUR 1.625%, échéance 05/08/2079

100 000 EUR

500 000 000 EUR

05/08/2026 ( Dans 138 jours )

EnBW Energie Baden-Württemberg est une grande entreprise énergétique allemande intégrée, active dans la production, le transport, la distribution et la vente d'électricité et de gaz.

L'Obligation émise par EnBW Energie BW ( Allemagne ) , en EUR, avec le code ISIN XS2035564629, paye un coupon de 1.625% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 05/08/2079

Prospectus dated 1 August 2019

EnBW Energie Baden-Württemberg AG
(Karlsruhe, Federal Republic of Germany)
EUR 500,000,000 Subordinated Resettable Fixed Rate Notes due November 2079
ISIN XS2035564975, Common Code 203556497, WKN A2YPEP
Issue Price: 100.00 per cent.
EUR 500,000,000 Subordinated Resettable Fixed Rate Notes due August 2079
ISIN XS2035564629, Common Code 203556462, WKN A2YPEQ
Issue Price: 100.00 per cent.
EnBW Energie Baden-Württemberg AG, Durlacher Allee 93, 76131 Karlsruhe, Federal Republic of Germany (the "Issuer" or
"EnBW AG" and together with its consolidated subsidiaries, "EnBW", the "EnBW Group" or the "Group") will issue on 5 August
2019 (the "Issue Date") EUR 500,000,000 Subordinated Resettable Fixed Rate Notes due November 2079 (the "NC5.25 Notes") and
EUR 500,000,000 Subordinated Resettable Fixed Rate Notes due August 2079 (the "NC8 Notes" and together with the NC5.25 Notes,
the "Notes" and each a "Series of Notes") in the denomination of EUR 100,000 each.
The Notes will be governed by the laws of the Federal Republic of Germany ("Germany").
The NC5.25 Notes will bear interest from and including 5 August 2019 (the "Interest Commencement Date") to but excluding
5 November 2024 (the "NC5.25 First Reset Date") at a rate of 1.1250 per cent. per annum. Thereafter, unless previously redeemed,
the NC5.25 Notes will bear interest from and including the NC5.25 First Reset Date to but excluding 5 November 2029 (the "NC5.25
First Modified Reset Date") at a rate per annum equal to the Reference Rate for the relevant Reset Period (each as defined in § 3(2)
of the terms and conditions of the NC5.25 Notes (the "NC5.25 Terms and Conditions")) plus a margin of 142.4 basis points per
annum (not including a step-up). Thereafter, unless previously redeemed, the NC5.25 Notes will bear interest from and including the
NC5.25 First Modified Reset Date to but excluding 5 November 2044 (the "NC5.25 Second Modified Reset Date") at a rate per
annum equal to the Reference Rate for the relevant Reset Period plus a margin of 167.4 basis points per annum (including a step-up of
25 basis points). Thereafter, unless previously redeemed, the NC5.25 Notes will bear interest from and including the NC5.25 Second
Modified Reset Date to but excluding 5 November 2079 (the "NC5.25 Maturity Date") at a rate per annum equal to the Reference
Rate for the relevant Reset Period plus a margin of 242.4 basis points per annum (including a step-up of 100 basis points).
Interest on the NC5.25 Notes will be payable annually in arrear on 5 November of each year, commencing on 5 November 2019 (short
first coupon).
The NC8 Notes will bear interest from and including Interest Commencement Date to but excluding 5 August 2027 (the "NC8 First
Reset Date" and together with the NC5.25 Reset Date, each a "First Reset Date") at a rate of 1.6250 per cent. per annum. Thereafter,
unless previously redeemed, the NC8 Notes will bear interest from and including the NC8 First Reset Date to but excluding 5 August
2032 (the "NC8 First Modified Reset Date") at a rate per annum equal to the Reference Rate for the relevant Reset Period (each as
defined in § 3(2) of the terms and conditions of the NC8 Notes (the "NC8 Terms and Conditions" and together with the NC5.25
Terms and Conditions, the "Terms and Conditions")) plus a margin of 172.5 basis points per annum (not including a step-up).
Thereafter, unless previously redeemed, the NC8 Notes will bear interest from and including the NC8 First Modified Reset Date to but
excluding 5 August 2047 (the "NC8 Second Modified Reset Date") at a rate per annum equal to the Reference Rate for the relevant
Reset Period plus a margin of 197.5 basis points per annum (including a step-up of 25 basis points). Thereafter, unless previously
redeemed, the NC8 Notes will bear interest from and including the NC8 Second Modified Reset Date to but excluding 5 August 2079
(the "NC8 Maturity Date") at a rate per annum equal to the Reference Rate for the relevant Reset Period plus a margin of 272.5 basis
points per annum (including a step-up of 100 basis points).
Interest on the NC8 Notes will be payable annually in arrear on 5 August of each year, commencing on 5 August 2020.
The Issuer is entitled to defer interest payments under each Series of Notes under certain circumstances (as set out in § 4(1) of the
Terms and Conditions) (such payments the "Deferred Interest Payments"). Such Deferred Interest Payments will not bear interest.
The Issuer may pay such Deferred Interest Payments (in whole or in part) at any time upon due notice (as set out in § 4(2) of the Terms
and Conditions) and will be required to pay such Deferred Interest Payments (in whole, but not in part) under certain other
circumstances (as set out in § 4(3) of the Terms and Conditions).
Unless previously redeemed or repurchased and cancelled, each Series of Notes will be redeemed at par on its relevant maturity date.

Each Series of Notes will initially be represented by a Temporary Global Note, without interest coupons, which will be exchangeable
in whole or in part for a Permanent Global Note without interest coupons, not earlier than 40 days after the Interest Commencement
Date, upon certification as to non-U.S. beneficial ownership.
This prospectus (the "Prospectus") constitutes a prospectus within the meaning of Article 6.3 of Regulation (EU) No 1129/2017 of the
European Parliament and of the Council of 14 June 2017 (as amended, the "Prospectus Regulation"). This Prospectus will be
published in electronic form together with all documents incorporated by reference on the website of the Luxembourg Stock Exchange
(www.bourse.lu).
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier, Luxembourg ("CSSF") in its capacity as
competent authority under the Prospectus Regulation. The CSSF only approves this Prospectus as meeting the standards of
completeness, comprehensibility and consistency imposed by the Prospectus Regulation. Such approval should neither be considered
as an endorsement of the Issuer that is subject of this Prospectus nor of the quality of the securities that are the subject of this Prospectus.
This Prospectus will be valid until 5 August 2020 and may in this period be used for admission of the Notes to trading on a regulated
market. In case of a significant new factor, material mistake or material inaccuracy relating to the information included in this
Prospectus which may affect the assessment of the Notes, the Issuer will prepare and publish a supplement to the Prospectus without
undue delay in accordance with Article 23 of the Prospectus Regulation. The obligation of the Issuer to supplement this Prospectus
will cease to apply once the Notes have been admitted to trading on the regulated market of the Luxembourg Stock Exchange and at
the latest upon expiry of the validity period of this Prospectus.
Investors should make their own assessment as to the suitability of investing in the Notes.
This Prospectus does not constitute an offer to sell, or the solicitation of an offer to buy, the Notes in any jurisdiction where such offer
or solicitation is unlawful.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act")
and subject to certain exceptions, the Notes may not be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons.
Application has been made to the Luxembourg Stock Exchange for each Series of Notes to be listed on the official list of the
Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated
market. The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive 2014/65/EU of the
European Parliament and of the Council of 15 May 2014 on markets in financial instruments (as amended, "MiFID II").
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made
available to any retail investor in the European Economic Area ("EEA"). For these purposes, a retail investor means a person who is
one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the meaning of Directive
(EU) 2016/97 (as amended, the "Insurance Distribution Directive"), where that customer would not qualify as a professional client
as defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by Regulation (EU)
No 1286/2014 (as amended, the "PRIIPs Regulation") for offering or selling the Notes or otherwise making them available to retail
investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail
investor in the EEA may be unlawful under the PRIIPs Regulation.
Following the respective First Reset Date, interest amounts payable under each Series of Notes are calculated by reference to the annual
swap rate for swap transactions denominated in Euro with a term of 5 years, which appears on the Reuters Screen Page
ICESWAP2/EURFIXA and which is provided by ICE Benchmark Administration Limited ("IBA"). As at the date of this Prospectus,
IBA appears on the register of administrators and benchmarks established and maintained by the European Securities and Markets
Authority ("ESMA") pursuant to Article 36 of the Benchmark Regulation (Regulation (EU) 2016/1011) (the "Benchmark
Regulation").
Prospective purchasers of the Notes should ensure that they understand the nature of the Notes and the extent of their exposure to risks
and that they consider the suitability of the Notes as an investment in light of their own circumstances and financial condition. Investing
in the Notes involves certain risks. Please review the section entitled "Risk Factors" beginning on page 1 of this Prospectus.
Joint Global Coordinators and Joint Structuring Advisors
BNP PARIBAS
DEUTSCHE BANK
Joint Lead Managers
BARCLAYS
BAYERNLB
BNP PARIBAS
CITIGROUP
DEUTSCHE BANK
HSBC
MORGAN STANLEY

RESPONSIBILITY STATEMENT
The Issuer with its registered office in Karlsruhe, Germany, accepts responsibility for the information contained in
this Prospectus and hereby declares that, having taken all reasonable care to ensure that such is the case, the
information contained in this Prospectus is, to the best of its knowledge, in accordance with the facts and does not
omit anything likely to affect the import of such information.
The Issuer further confirms that (i) this Prospectus contains all information with respect to the Issuer and its
subsidiaries taken as a whole (the "EnBW Group", "EnBW" or the "Group") and to the Notes which is material in
the context of the issue and offering of the Notes, including all information which, according to the particular nature
of the Issuer and of the Notes is necessary to enable investors and their investment advisers to make an informed
assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Issuer and the
Group and of the rights attached to the Notes; (ii) the statements contained in this Prospectus relating to the Issuer,
the Group and the Notes are in every material particular true and accurate and not misleading; (iii) there are no other
facts in relation to the Issuer, the Group or the Notes the omission of which would, in the context of the issue and
offering of the Notes, make any statement in this Prospectus misleading in any material respect; and (iv) reasonable
enquiries have been made by the Issuer to ascertain such facts and to verify the accuracy of all such information and
statements.
NOTICE
No person is authorised to give any information or to make any representation other than those contained in this
Prospectus and, if given or made, such information or representation must not be relied upon as having been
authorised by or on behalf of the Issuer or the Joint Lead Managers (as defined in the section "Subscription and Sale
of the Notes").
This Prospectus should be read and understood in conjunction with any supplement hereto and with any documents
incorporated herein or therein by reference.
Each investor contemplating purchasing any Notes should make its own independent investigation of the financial
condition and affairs, and its own appraisal of the creditworthiness, of the Issuer. This Prospectus does not constitute
an offer of Notes or an invitation by or on behalf of the Issuer or the Joint Lead Managers to purchase any Notes.
Neither this Prospectus nor any other information supplied in connection with the Notes should be considered as a
recommendation by the Issuer or the Joint Lead Managers to a recipient hereof and thereof that such recipient should
purchase any Notes.
This Prospectus reflects the status as of its date. The offering, sale and delivery of the Notes and the distribution of
this Prospectus may not be taken as an implication that the information contained herein is accurate and complete
subsequent to the date hereof or that there has been no adverse change in the financial condition of the Issuer since
the date hereof.
To the extent permitted by the laws of any relevant jurisdiction, neither any Joint Lead Manager nor any of its
respective affiliates nor any other person mentioned in this Prospectus, except for the Issuer, accepts responsibility
for the accuracy and completeness of the information contained in this Prospectus or any document incorporated by
reference, and accordingly, and to the extent permitted by the laws of any relevant jurisdiction, none of these persons
accept any responsibility for the accuracy and completeness of the information contained in any of these documents.
The Joint Lead Managers have not independently verified any such information and accept no responsibility for the
accuracy thereof.
This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in
any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make
such offer or solicitation.
The distribution of this Prospectus and the offering, sale and delivery of the Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required to inform themselves about and
i

to observe any such restrictions. For a description of the restrictions applicable in the EEA, the United States of
America and the United Kingdom, see "Subscription and Sale of the Notes Selling Restrictions".
For the avoidance of doubt the content of any website referred to in this Prospectus does not form part of this
Prospectus and the information on such websites has not been scrutinised or approved by the CSSF as competent
authority under the Prospectus Regulation.
The language of this Prospectus is English. In respect of the Terms and Conditions German is the controlling and
legally binding language.
In this Prospectus all references to "", "EUR" or "Euro" are to the currency introduced at the start of the third stage
of the European Economic and Monetary Union, and as defined in Article 2 of Council Regulation (EC) No 974/98
of 3 May 1998 on the introduction of the Euro, as amended.
MIFID II PRODUCT GOVERNANCE / TARGET MARKET: PROFESSIONAL INVESTORS
AND ECPS ONLY
Solely for the purposes of each manufacturer's product approval process, the target market assessment in respect of
both Series of Notes has led to the conclusion that: (i) the target market for the Notes is eligible counterparties and
professional clients only, each as defined in MiFID II; and (ii) all channels for distribution of the Notes to eligible
counterparties and professional clients are appropriate. Any person subsequently offering, selling or recommending
the Notes (a "distributor") should take into consideration the manufacturers' target market assessment; however, a
distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Notes
(by either adopting or refining the manufacturers' target market assessment) and determining appropriate distribution
channels.
PRIIPS REGULATION / PROHIBITION OF SALES TO EEA RETAIL INVESTORS
The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the EEA. For these purposes, a retail investor means a person who
is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of MiFID II; or (ii) a customer within the
meaning of the Insurance Distribution Directive, where that customer would not qualify as a professional client as
defined in point (10) of Article 4(1) of MiFID II. Consequently, no key information document required by the PRIIPs
Regulation for offering or selling the Notes or otherwise making them available to retail investors in the EEA has
been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor
in the EEA may be unlawful under the PRIIPs Regulation.
Where acting as agent on behalf of a disclosed or undisclosed client when purchasing, or making or accepting an
offer to purchase, any Notes (or any beneficial interests therein) from the Issuer and/or the Joint Lead Managers the
foregoing representations, warranties, agreements and undertakings will be given by and be binding upon both the
agent and its underlying client.
BENCHMARK REGULATION: STATEMENT ON REGISTRATION OF BENCHMARK
ADMINISTRATOR
Following the respective First Reset Date, interest amounts payable under each Series of Notes are to be calculated
by reference to the annual swap rate for swap transactions denominated in Euro with a term of 5 years, which appears
on the Reuters Screen Page ICESWAP2/EURFIXA and which is provided by IBA. As at the date of this Prospectus,
IBA appears on the register of administrators and benchmarks established and maintained by ESMA pursuant to
Article 36 of the Benchmark Regulation.
STABILISATION
IN CONNECTION WITH THE ISSUE OF THE NOTES, DEUTSCHE BANK AG, LONDON BRANCH
(THE "STABILISING MANAGER") (OR ANY PERSON ACTING ON BEHALF OF ANY STABILISING
MANAGER) MAY OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO
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SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH
MIGHT OTHERWISE PREVAIL. HOWEVER, STABILISATION MAY NOT NECESSARILY OCCUR.
ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE
PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE NOTES IS MADE AND, IF BEGUN,
MAY CEASE AT ANY TIME, BUT IT MUST END NO LATER THAN THE EARLIER OF 30 DAYS AFTER
THE ISSUE DATE OF THE NOTES AND 60 DAYS AFTER THE DATE OF THE ALLOTMENT OF THE
NOTES. ANY STABILISATION ACTION OR OVER-ALLOTMENT MUST BE CONDUCTED BY THE
STABILISING MANAGER (OR ANY PERSON ACTING ON BEHALF OF THE STABILISING
MANAGER) IN ACCORDANCE WITH ALL APPLICABLE LAWS AND RULES.
ALTERNATIVE PERFORMANCE MEASURES
Certain terms used in this Prospectus and financial measures presented in the documents incorporated by reference
are not recognised financial measures under International Financial Reporting Standards as adopted by the European
Union ("IFRS") ("Alternative Performance Measures") and may therefore not be considered as an alternative to
the financial measures defined in the accounting standards in accordance with generally accepted accounting
principles. The Issuer has provided these Alternative Performance Measures because it believes they provide
investors with additional information to assess the operating performance and financial standing of EnBW's business
activities. The definition of the Alternative Performance Measures may vary from the definition of identically named
alternative performance measures used by other companies. The Alternative Performance Measures for EnBW
presented by the Issuer should not be considered as an alternative to measures of operating performance or financial
standing derived in accordance with IFRS. These Alternative Performance Measures have limitations as analytical
tools and should not be considered in isolation or as substitutes for the analysis of the consolidated results or liabilities
as reported under IFRS.
For further information, please refer to "General Information on the Issuer and the Group Alternative Performance
Measures".
FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements. A forward-looking statement is a statement that does
not relate to historical facts and events. They are based on analyses or forecasts of future results and estimates of
amounts not yet determinable or foreseeable. These forward-looking statements are identified by the use of terms
and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict",
"project", "will" and similar terms and phrases, including references and assumptions. This applies, in particular, to
statements in this Prospectus containing information on future earning capacity, plans and expectations regarding
Group's business and management, its growth and profitability, and general economic and regulatory conditions and
other factors that affect it.
Forward-looking statements in this Prospectus are based on current estimates and assumptions that the Issuer makes
to the best of its present knowledge. These forward-looking statements are subject to risks, uncertainties and other
factors which could cause actual results, including Group's financial condition and results of operations, to differ
materially from and be worse than results that have expressly or implicitly been assumed or described in these
forward-looking statements. The Group's business is also subject to a number of risks and uncertainties that could
cause a forward-looking statement, estimate or prediction in this Prospectus to become inaccurate. Accordingly,
investors are strongly advised to read the section "General Information on the Issuer and the Group" of this
Prospectus. This section includes more detailed descriptions of factors that might have an impact on the Group's
business and the markets in which it operates.
In light of these risks, uncertainties and assumptions, future events described in this Prospectus may not occur. In
addition, neither the Issuer nor the Joint Lead Managers assume any obligation, except as required by law, to update
any forward-looking statement or to conform these forward-looking statements to actual events or developments.
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TABLE OF CONTENTS
RISK FACTORS .............................................................................................................................................. 1
USE OF PROCEEDS ......................................................................................................................................10
TERMS AND CONDITIONS OF THE NC5.25 NOTES ............................................................................. 11
TERMS AND CONDITIONS OF THE NC8 NOTES ..................................................................................50
GENERAL INFORMATION ON THE ISSUER AND THE GROUP .......................................................89
TAXATION .................................................................................................................................................... 113
SUBSCRIPTION AND SALE OF THE NOTES ........................................................................................120
GENERAL INFORMATION .......................................................................................................................122
DOCUMENTS INCORPORATED BY REFERENCE ..............................................................................124
iv

RISK FACTORS
Before deciding to purchase the Notes, investors should carefully review and consider the following risk factors and
the other information contained in this Prospectus. Should one or more of the risks described below materialise, this
may have a material adverse effect on the business, prospects, shareholders' equity, assets, financial position and
results of operations (Vermögens-, Finanz- und Ertragslage) or general affairs of the Issuer or the Group. Moreover,
if any of these risks occur, the market value of the Notes and the likelihood that the Issuer will be in a position to
fulfil its payment obligations under the Notes may decrease, in which case the holders of the Notes could lose all or
part of their investments. Factors which the Issuer believes may be material for the purpose of assessing the market
risks associated with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the Notes,
but the Issuer may be unable to pay interest, principal or other amounts on or in connection with the Notes for other
unknown reasons than those described below. Additional risks of which EnBW Group is not presently aware could
also affect the business operations of EnBW Group and have a material adverse effect on EnBW Group's business
activities and financial condition and results of operations. Prospective investors should read the detailed
information set out elsewhere in this Prospectus (including any documents incorporated by reference herein) and
reach their own views prior to making any investment decision.
Words and expressions defined in the Terms and Conditions of the Notes below shall have the same meanings in this
section.
Potential investors should, among other things, consider the following:
Risks relating to the Issuer and EnBW Group
I. Financial Risks
Risk related to Changes in Interest Rates
Key factors influencing the present value of nuclear power and pension provisions are interest rates.
Any change in the discount rate has an effect on the nuclear power and pension provisions of EnBW. The present
value of such provisions falls when the discount rate increases while the present value of the nuclear power and
pension provisions increases when the discount rate falls. The discount rate for pension provisions fell to 1.25% at
30 June 2019 from 1.8% at the end of the 2018 financial year. The future development of interest rates could have a
significant negative impact on net debt.
The occurrence of such risks could have material adverse effects on the ratings of EnBW. There is a risk that the
rating agencies will downgrade the credit rating of EnBW due to the aforementioned negative impact on the financial
position. In the case of a downgraded rating and a deterioration in capital market conditions, it is possible that this
will result in increased refinancing costs and additional liquidity requirements.
Liquidity Risk
Risks arise from the process of ensuring adequate liquidity to meet EnBW Group's financial obligations in due time.
EnBW Group is dependent upon adequate available lines of credit at banks, capital market access as well as free cash
and cash equivalents in order to meet its financial obligations. Margin regulations for stock market transactions and
bilateral margin agreements for the balancing of daily market price movements, may lead to short-term cash outflows
as a result of unfavourable market developments.
Due to unforeseeable payments, especially margin payments, payments in connection with section 5 of the German
Renewable Energies Ordinance (Verordnung zur Durchführung des Erneuerbare-Energien-Gesetzes und des
Windenergie-auf-See-Gesetzes (Erneuerbare-Energien-Verordnung)) of TransnetBW, unused project funds or tax
issues, as well as exogenous shocks, such as financial market crashes, EnBW Group's liquidity planning is subject to
uncertainty that could lead to deviations from the planned payments. These effects could have a negative impact on
net debt.
The occurrence of such risks could have adverse effects on the ratings of EnBW. There is a risk that the rating
1

agencies will downgrade the credit rating of EnBW due to the aforementioned negative impact on the financial
position. In the case of a downgraded rating and a deterioration in capital market conditions, it is possible that this
will result in increased refinancing costs and additional liquidity requirements.
Risk related to Market Prices of Financial Investments
The financial investments used to cover EnBW's pension and nuclear obligations are subject to risks due to price
changes and other valuation changes as a result of a volatile financial market environment. A high portion of the
assets are measured at fair value through profit or loss in accordance with IFRS 9. Fluctuations in the value of these
securities are recognized in profit or loss. Through corresponding effects, this could have a negative impact on net
debt.
II. Market Risks
Power and Fuel Price Risk
EnBW Group both operates power plants for the generation of electricity (upstream business) and supplies customers
(downstream business) with electricity. The electricity generated is sold to the wholesale market and electricity for
the supply of retail customers is purchased from the wholesale market. Fuels for the generation (including hard coal
and gas) are purchased as well in the wholesale market. Additionally, the Group entered into long term supply
contracts and may take positions (long and/or short) for the respective commodities in the market. These decisions
are partly based on forecasts of future developments and the related demand for energy.
A significant deviation of any, or a combination of the assumptions from the Group's projections, may have a
significant effect on earnings, net assets and might lead to an increase in net debt of the EnBW Group. Hence there
is a risk that the rating agencies will downgrade the credit rating of EnBW due to the aforementioned negative impact
on the financial position. In the case of a downgraded rating and a deterioration in capital market conditions, it is
possible that this will result in additional liquidity requirements in the form of increased refinancing costs.
Competition Risk in the Energy Markets
There is a risk that the continued tense competitive situation for all EnBW brands in the electricity, gas and energy
solutions business could have a negative effect on the customer base, sales volumes and price levels. The willingness
of customers to switch suppliers and the pressure on prices remain high. The development and expansion of system
solutions tailored to the various customer segments alongside the traditional supply of electricity and gas in the areas
of energy technology in the home, e.g. with products such as photovoltaic storage systems, the area of corporate
energy efficiency and electromobility could result in a negative effect on earnings.
III. Operational Risks
Risk in relation to Construction Projects
The business model of EnBW Group encompasses the implementation of large scale construction projects (e.g. the
Suedlink and ULTRANET grid projects or the He Dreiht offshore wind project).
The development and implementation phases of construction projects in the area of generation capacities and grids
entail three basic risks:
·
Projects are subject to approval by the authorities which may be delayed in some cases and projects may
have to be abandoned if approval is not received. In addition, there is a noticeable trend of subsequently
challenging the legality of approvals that have already been issued.
·
Risks arising from a misinterpretation of customer requirements and framework conditions as well as
technological misjudgements.
·
The implementation phase of a project generally entails quality, deadline and cost risks.
The occurrence of one or more of these risks could have material adverse effects on the net assets, financial position
and results of operations of the EnBW Group and the Issuer's ability to fulfil its obligations under the Notes.
2

Information and Communication Technology ("ICT") Risk
The EnBW Group relies on the secure and stable operation of its information and communication technology, as it
plays an important role for the running its power plants and grids. A high availability of this technology is
indispensable. Any material interruptions or unauthorised access from outside may lead to unplanned closures of
power plants and grid outages. The occurrence of this risk may have material adverse effects on financial position
and results of operations of the EnBW Group and the Issuer's ability to fulfil its obligations under the Notes.
Risk related to the Dismantling of Nuclear Power Plants
The dismantling of nuclear power plants is highly complex.
All of EnBW's nuclear power plants are expected to be dismantled over the coming years. This process involves risks
of missed deadlines due to delays in receiving approvals for transport and storage of waste, as well as risks from
delays to dismantling projects due to a change in conditions or planning premises.
The occurrence of one or more of these risks could have negative effects on financial position and results of
operations of the EnBW Group and affect the Issuer's ability to fulfil its obligations under the Notes.
Risk related to the Availability of Power Plants
EnBW Group operates power plants for the generation of electricity. These can be of conventional as well as
renewable technology. As the electricity production for a specific time might have already been sold to the market in
advance, the plants have to be in operation at these times in order to fulfil the production obligation. The operation
of the plants can be constrained or completely stopped. This can be caused by factors which are partially or in full
out of the Group's sphere of influence. These include, among others, longer maintenance periods as expected, lack
of supplies such as fuel and weather conditions. Depending on their duration, interruptions to the operation of one or
more power plants can lead to significantly lower than expected earnings for the Group.
Risk in connection with Internationalisation
EnBW is following a strategy of selective internationalisation in the area of renewable energies.
Material adverse changes in the political environment of foreign countries where EnBW is conducting business is
the most eminent risk that could have material adverse negative effects on the financial position and results of
operations of the EnBW Group and the Issuer's ability to fulfil its obligations under the Notes.
Environmental Protection Risk
The operation of energy generation and transmission systems inherently involves environmental protection risks with
potential impacts on air, water and land. EnBW operates its systems in accordance with the safety requirements that
it deems sufficient for this purpose. Nonetheless, there may be unforeseen risks such as malfunctions or failures
resulting in environmental damages. These can result in plant shutdowns or closures or grid outages, leading to
mitigation costs and potentially harm EnBW's reputation. The occurrence of one or more of these risks may have
material adverse effects on financial position and results of operations of the EnBW Group and the Issuer's ability to
fulfil its obligations under the Notes.
IV. Regulatory / Political Risks
Risk in relation to the Termination of Coal-Fired Power Generation
The German government established a commission on "Growth, Structural Change and Employment" (Kommission
"Wachstum, Strukturwandel und Beschäftigung") that was tasked, inter alia, with defining an end date for coal-fired
power generation. This commission recommends the termination of coal-fired power generation in Germany by
2038. However, this deadline could be moved forward to 2035 if the review to be carried out in 2032 indicates that
an earlier termination date would be possible. German brown and hard coal capacities in the energy industry shall
also be reduced to 15 Gigawatts ("GW") each, leaving a total of 30 GW, by 2022 from a total of currently around 42
GW. A further reduction to a total of 17 GW will then be required by 2030. The commission has outlined
compensation rules for the period up to 2030 for the operators of the power plants to be decommissioned. As the
results have not yet been translated into law and further details about the design of the compensation rules are not
currently known, there is a risk, that EnBW as an operator of hard coal and brown coal power plants will be negatively
affected by an earlier than expected exit or lower compensation than the remaining value of the assets. This may
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have material adverse effects on the net assets and may lead to lower earnings.
Risk related to Changes in Regulation
EnBW and its operations are subject to significant regulation and supervision by various regulatory bodies, including
German municipal, state, federal and European Union ("EU") authorities. This affects the following segments in the
respective areas:
·
Incentive regulation (Anreizregulierung) regarding the Grids segment, and
·
German Renewable Energies Act (Erneuerbare Energien Gesetz) regarding the Generation and Trading
segment.
Any material adverse change in the aforementioned regulation may result in increased operational and administrative
expenses and thus may adversely affect earnings for the Group, the Group's balance sheet and net debt.
Risk related to the Renewal of Franchise Agreements
Subsidiaries of EnBW Group operate distribution grids on the basis of franchise agreements with municipalities
relating to the use of the relevant local infrastructure. Significant parts of the related services are connected with
these agreements. These franchise agreements have a term of a maximum of 20 years. There is a trend among
municipalities to return their electricity, gas and water supply networks to public ownership. There is a risk that
EnBW's subsidiaries might not be able to extend these agreements. For EnBW Group this could lead to lower
earnings for the Grids segment.
V. Legal Risks
Compliance Risk
The EnBW Group is subject to compliance risks in several forms. The most eminent compliance risk identified relates
to potential judicial or regulatory penalties resulting from fraudulent activities.
Materialisation of this risk may result in fines and may have significant strategic implications and damage EnBW's
reputation. Hence, the occurrence of this risk could have material adverse effects on the net assets, financial position
and results of operations of the EnBW Group and the Issuer's ability to fulfil its obligations under the Notes.
Data Protection Risk
Failure to implement the requirements of the EU General Data Protection Regulation (GDPR) in the EnBW Group
could at worst result in the imposition of a fine of up to 4% of EnBW Group external revenue. There is a risk that
not all legal requirements have been implemented in the specialist departments. All measures taken and documented
by EnBW Group have the effect of reducing fines. These implementation policies avoid official measures and are
taken into account when deciding the amount of any fine. Material administrative fines would have adverse effects
on the financial position and results of the EnBW Group and the Issuer's ability to fulfil its obligations under the
Notes.
Risks relating to the Notes
VI. Risks associated with the Characteristics of the Notes
Risk related to Subordination
The obligations of the Issuer under the Notes constitute unsecured obligations of the Issuer ranking pari passu among
themselves and with any Parity Securities, subordinated to all present and future unsubordinated and subordinated
obligations of the Issuer, at least pari passu with all other present and future unsecured obligations of the Issuer
ranking subordinated to all unsubordinated and subordinated obligations of the Issuer, except for any subordinated
obligations required to be preferred by mandatory provisions of law; and senior only to the rights and claims of
holders of Junior Securities. In a liquidation, dissolution, insolvency, composition or other proceeding for the
avoidance of insolvency of, or against, the Issuer, it is very likely that the holders of the Notes (the "Holders" and
each a "Holder") may recover proportionately less than the holders of unsubordinated obligations of the Issuer or
may recover nothing at all. Holders will have limited ability to influence the outcome of any insolvency proceedings
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