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SNCF RÉSEAUGREEN BOND ISSUANCE PROGRAMME

FRIDAY OCTOBER THE 14TH 2016

Ticker : RESFER

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SUMMARY

01. COMPANY OVERVIEW

02. SNCF RÉSEAU GREEN BOND FRAMEWORK AND DEBUT GREEN BOND ISSUE

03. INVESTMENTS DEDICATED TO THE GLOBAL CLIMATE CHALLENGE

04. REPORTING & METRICS

2 FRIDAY OCTOBER THE 14TH 2016

–3

01.COMPANY OVERVIEW


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SNCF RÉSEAU AND THE FRENCH RAILWAY NETWORK

SNCF RÉSEAU MAIN RESPONSIBILITIES

+ Ensure a fair access to the French network,

+ Organize train services and development of rail

traffic,

+ Ensure maintenance and enhancement of rail

assets,

+ Ensure the development of the network.

4

SNCF RÉSEAU IS THE OWNER AND MANAGER OF THE FRENCH RAILWAY INFRASTRUCTURE


Per day : 15,000 trains - 5 million passengers - 250 000 tons of goods carried

–

IN LINE WITH THESE 4 RESPONSIBILITIES, SNCF RÉSEAU HAS PRIORITIZED :

+ Ensuring security,

+ Giving priority to the refurbishment and

upgrade of the network,

+ Building and maintaining the structured

network (particulary in the Paris area).

5

SNCF Réseau aims to ensure, develop and

operate a reliable, highly efficient and attractive

network


–

CREDIT RISK EQUAL TO THE FRENCH STATE

+ is not subject to private-sector bankruptcy law,

+ may only be dissolved by an amending law transferring its

rights and obligations to another public entity.

SNCF RÉSEAU :

+ performs a public sector mission and enjoys a natural

monopoly position as the sole owner and manager of the

French railway infrastructure with no risk of deregulation,

+ was included in the “Government Related Entity” list by the

European commission in 2002 and is eligible to the ECB

Public Sector Purchasing Programme.

SNCF Réseau debt is seen by credit rating agencies as implicitly guaranteed by the French State

RATINGS LONG-TERM SHORT-TERM

Fitch AA F1+

Moody’s Aa2 P-1

Standard & Poor’s AA A-1+

As a 100% State-owned public entity, SNCF Réseau benefits from a strong support from the French

State based on its legal status (EPIC).

AS AN EPIC, SNCF RÉSEAU :


–7

02.SNCF RÉSEAU GREEN BOND FRAMEWORK AND DEBUT GREEN BOND ISSUE


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WHY ISSUING A GREEN BOND ?

+ Rely on a dynamic Green Bonds market

in full expansion,

+ Diversify our funding sources and

increase our funding capacity,

+ Highlight the industrial achievements of

SNCF Réseau and their beneficial impact

on climate,

+ A modern and innovative tool: #1 rail

infrastructure manager in the world and

#1 transport company in Europe to issue

a Green Bonds.


4,513,0

36,748,0

60,4

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

110,0

2012 2013 2014 2015 2016

Green Bonds issuances outstanding(in US$ Bn)

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CLIMATE BONDS STANDARD FOR LOW-CARBON TRANSPORT WERE FINALIZED IN 2016

Projects are eligible for certification based on whether or not they cope with emissions’ trajectory that limits global warming to 2 degrees. Eligible assets are :

+ Public passengers transport,

+ Dedicated freight railway lines and supporting infrastructure.

CLEAN TRANSPORTATION IS PART OF ELIGIBLE SECTORS IN THE GREEN BONDS PRINCIPLES

Use of proceeds must support: low energy or low emission transportation assets, systems, infrastructure, components and services (such as electric, public, rail, multi-modal transportation, infrastructure for clean energy vehicles and reduction of harmful emissions, etc.).

9

GREEN BOND MARKET DEVELOPMENTS IN THE RAIL SECTOR


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SNCF RÉSEAU GREEN BOND FRAMEWORK SNCF RÉSEAU FRAMEWORK WILL BE IN LINE WITH THE GREEN BOND PRINCIPLES

10

+ This category includes projects related to SNCF Réseau’s efforts to ensure the efficiency of the rail system throughout its various worksites,

+ Typology of projects could be: track, catenary or signaling system upgrade, electrification of lines, etc.

OTHER INVESTMENTS LINKED TO THE GLOBAL CLIMATE CHANGE CHALLENGES, THE PROTECTION OF BIODIVERSITY AND NATURAL RESOURCES

+ Investments related to new rail lines and rail lines extensions which ensure access to the network and the efficient movement of people and freight, for example, LGV Est-Européenne, LGV SEA, Projet EOLE, etc.

+ This category will include projects which ensure the inclusion of the protection of biodiversity and natural resources in the management approach of the existing railway network.

INVESTMENTS RELATED TO MAINTENANCE,

UPGRADE AND ENERGY EFFICIENCY OF THE

RAIL SYSTEM

INVESTMENTS RELATED TO NEW RAIL LINES

AND RAIL LINES EXTENSIONS

USE OF PROCEEDS :

+ An amount equal to net proceeds will be allocated to investments defined as “Eligible Green Projects”,

+ Eligible Green Projects include new and ongoing projects with disbursements up to 2 years prior to the Notes issuance.


–

A RECURRENT PROGRAMME

11

FOCUS ON MAINTENANCE

SNCF RÉSEAU AIMS TO ISSUE AT LEAST ONE GREEN BOND BENCHMARK EVERY YEAR

SNCF RÉSEAU GREEN BOND’S CATEGORIES TYPOLOGY OF PROJECTSINVESTMENT

IN € MILLION

2016 2017 2018 2019



RAIL SYSTEM

Track, ballast, sleepers & switches 855 996 744 734

catenary's system renewal 94 139 158 186

signalling's system renewal 357 374 425 460

ss-total : 1 306 1 509 1 327 1 380

INVESTMENTS RELATED TO NEW RAIL LINES

AND RAIL LINES EXTENSIONS

LGV EE Phase 2 (2016), LGV SEA (2017), LGV BPL

(2017),LGV CNM (2017), Projet EOLE (2022/2024)... 414 287 234 203

OTHER INVESTMENTS LINKED TO THE

GLOBAL CLIMATE CHANGE CHALLENGES,

THE PROTECTION OF BIODIVERSITY AND

NATURAL RESOURCES

Currently examples are not yet available in this

category but are expected to be developed over

time.

nd nd nd nd

Total 1 720 1 796 1 561 1 583


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03.INVESTMENTS DEDICATED TO THE GLOBAL CLIMATE CHALLENGE


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RAILWAY TRANSPORT IS KEY TO A LOW CARBON ECONOMY

TRANSPORT SECTOR IS THE LARGEST THEME IN THE CLIMATE-ALIGNED UNIVERSE TOTALLING $464bn

(1 605 CLIMATE-ALIGNED BONDS, 148 ISSUERS)

+ Transport theme accounts for 70% of the investment grade segment of the climate-aligned universe,

+ In general, bonds within the transport theme tend to be the largest, with an average issuance size of over $400m

(compared to the average bond in the energy theme of $135m) and have the longest tenor (since the majority are rail

projects),

+ The majority of issuance is from government entities. This group of issuers includes the largest issuer in the universe, i.e.

China Railway Corp, Network Rail, the EIB, EUROFIMA, the New York Metropolitan Transportation Authority, etc.

+ Transport themed labelled green bonds total $8.6bn.

13

Transport (66.8%)

Energy (18.8%)

Multi-Sector (8.2%)

Water (2.6%)

Building & Industry (2%)

Agriculture & Forestry(0.9%)Waste & Pollution Control(0.7%)

Rail dominates the

transport theme (93%)


Source : CBI State of the Market

2016, CBI/HSBC (July 2016)

TRANSPORT AND ENERGY ARE THE LARGEST CLIMATE THEMES

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THE CARBON RELEVENCY PRINCIPLERAIL EMITS LESS GREENHOUSE GASES THAN OTHER MODES OF TRANSPORT

To maintain a safe and operational network, and thus favor a modal shift towards rail, SNCF Réseau

is carrying out a major renovation program of its rail network.

3 6 12 17 23 29

74

141168

207

0

50

100

150

200

250

passengers-km

7 17 21 3477

552

0

100

200

300

400

500

600

tons-km

Sources : SNCF (2014), Eurolines (2014), DGAC (2014), base Carbone ADEME (2015) Sources : Fret SNCF (2014), SNCF Logistics (2011), ADEME

GREENHOUSES GASES EMISSIONS BY

14

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CARBON AMORTIZATION FOR A RENEWAL OF A RAILWAY

REFERENCE SCENARIO

If not renovated, rail service will eventually be stopped,

traffic will be carried over the other modes and GHG

emissions will increase accordingly.

CARBON AMORTIZATION DEPENDS ON TWO

PARAMETERS

+ Emissions due to regeneration works. For reference,

steel used for the tracks stand for 2/3 of the overall

emissions.

+ Emissions saved thanks to the regeneration works

depend on the traffic volumes on the tracks throughout

the life cycle of the infrastructure (30 years).


FRENCH RAILWAY TRAFFIC (2013)MODAL SHIFT

HYPOTHESIS

High-Speed

Trains53,7 Bn p.km*

50 % airplane, 40 %

self-owned car, 10 %

buses

Transnational &

InterRegional

Trains

7,7 Bn p.km

75 % self-owned car,

20 % buses, 5 %

airplane

Regional Trains 13,6 Bn p.km90 % self-owned car,

10 % buses

Paris area Trains 12,3 Bn p.km 100 % self-owned car

Freight 32,2 Bn t.km90 % Trucks,

10 % river traffic

*p.km : passenger per km and t.km : tons per km

Source : prospective study by SNCF Réseau (RFF), Mathieu, Pavaux, Gaudry, « Evaluation de la contribution du réseau et de la politique ferroviaires à l’objectif du

facteur 4 pour les déplacements des voyageurs à moyenne et longue distance » (2013)

MAIN HYPOTHESIS

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FULL TRACK RENEWAL CARBON RELEVENCY

+ With a carbon footprint of 53,200 tons eq CO2 for the line regeneration between Montpellier and Narbonne,

the line renewal shows about :

100,000 tons equivalent CO2 issued

+ Based on the real number of trains circulating between Montpellier and Narbonne, yield assumptions on

trains as well as modal shift assumptions toward other means of transport, railroad services between the

two cities allows to save up to 100,000 tons eq CO2 per year, i.e :

3 million tons eq CO2 saved over 30 years


THE EXAMPLE OF THE MONTPELLIER - NARBONNE LINE

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04.REPORTING & METRICS


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4 CHALLENGES & 16 COMMITMENTS

+ The CSR policy was drafted in 2015 by the Environment and Sustainable Development Department, with SNCF

Réseau’s four core businesses, regional departments and transversal functions,

+ A policy validated by the Audit Committee and the Supervisory Board,

+ A policy which is the CSR reporting base of SNCF Réseau.


SNCF RÉSEAU’S CSR POLICY

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SECOND OPINION

SNCF Réseau has selected Oekom research to deliver a “Second Party Opinion” on this framework in order to provide investors an independent assessment on the alignment of the framework with the Green Bond Principles.

CLIMATE BONDS CERTIFICATION

Each Green bond issue will be reviewed by an independent assessment on the alignment of the framework with the Climate Bonds Initiative delivered by Oekom research.

REPORTING

An annual report will be established by SNCF Réseau and will focus on the correct allocation of funds to eligible projects (certified by independent financial auditors) and the monitoring of metrics by type of eligible project categories.

SECOND OPINION & CLIMATE CERTIFICATION


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METRICS RELATED TO THE ELIGIBLE GREEN PROJECTS

RESTRICTED FRIDAY OCTOBER THE 14TH 2016

CATEGORIES METRICS



RAIL SYSTEM

Issued and avoided emissions:

+ Total GHG emissions of the renewal project (teqCO2)

+ Modal shift

+ Total GHG emissions saved thanks to the renewal project (teqCO2)

Frequency

Natural resource preservation :

+ Share of re-used rails from the renewal project (tons of steel)

+ Share of recycled rails (tons of steel)

+ Share of ballast re-used on the renewal project (tons)

+ Volume of wooden sleepers recycled for energy purposes (tons)

+ Number of kilometers of catenary replaced

INVESTMENTS RELATED TO NEW RAIL

LINES AND RAIL LINES EXTENSIONS

Issued and avoided emissions :

+ Total GHG emissions of the project (teqCO2)

+ Modal shift

+ Total GHG emissions saved thanks to the project (teqCO2)

Natural resource preservation :

+ KWh generated / saved & volume of water re-used

+ Number of hectares compensated

+ Soil volume re-used

OTHER INVESTMENTS LINKED TO THE

PROTECTION OF BIODIVERSITY AND NATURAL

RESOURCES

Currently metrics are not yet available in this category but are expected to be developed over

time20

–

SNCF RESEAU WASTE MANAGEMENT, A SOLUTION TO THE CLIMATE CHALLENGE

SHIFT FROM WASTE MANAGEMENT TO RESOURCES AND MATERIALS GENERATION

Increase from 80% to 95% recycled products by 2030Waste : All materials/products wasted or generated by the projects

on the rail network

BALLAST

110 M tons throughout the network

2 M tons recycled per year

40% direct re-use

TRAIN TRACKS/ FERROUS METAL

5,5 M tons throughout the network

120 000 tons recycled per year

7% re-use / 93% recycled

CONCRETE RAILWAY SLEEPERS

15 M tons throughout the network


100% materials recycled

WOODEN RAILWAY SLEEPERS

1,6 M tons throughout the network


100% energy recovered

CATENARIES / NON-FERROUS METAL

+ 100 000 tons throughout the network


100% materials recycled

+ Safety

+ Waste extraction/recuperation

+ Circular Economy

+ Innovation for re-use

Quantity and

Quality guaranteed

over 40 years


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SNCF RÉSEAU’S CSR POLICY

22

SNCF RÉSEAU’S CSR PERFORMANCE IS RATED BY NON-FINANCIAL RATING AGENCIES WITH STRONG PROGRESSION OVER THE LAST 18 MONTHS

AGENCY RATING 2016 RAKING

VIGÉO 49/100#6 out of 29

companies

OEKOM

researchC+

#5 out of 45

companies

ENVIRONMENT SCORE : 61/100 (Vigéo)

“The main elements accounting for the score increase remain the more exhaustive approach to management of climate change issues through more reliance on renewable energy and facilities and fleet optimisation programmes throughout the Company's operations.”

According to Vigéo, SNCF Réseau’s overall ranking in the Transport & Logistics sector is #6 out of 29 companies

“A robust performance is displayed regarding the Environment and Social pillars, which appear to be the main drivers of SNCF Réseau’s

performance.”

According to Oekom research, SNCF Réseau’s overall ranking in the Transportation Infrastructure sector is #5 out of 45 companies

“Mainly active in the operation of environmentally sound rail infrastructure; adequate measures to minimize transport-related noise emissions;

reasonable measures to ensure health and safety of users, inhabitants and/or passers-by”


–23

CONTACTS+ Guillaume HINTZY - Vice president Financing and Treasury ([email protected])+ Etienne OBERTHÜR - Financial Market operations – Treasury ([email protected])+ Sophie JALABERT - Corporate social responsibility ([email protected])


mailto:[email protected]



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DISCLAIMERThis document is being furnished to you solely for your information on a confidential basis and may not be reproduced, redistributed or passed on, in whole or in part, to any other person. This document does not constitute or form part of any solicitation, offer or invitation to purchase or subscribe for any securities issued by SNCF Réseau and neither it nor any part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. Accordingly, it is not directed to the specific investment objectives, financial situation or particular needs of any recipient. You should consult with your own legal, regulatory, tax, business, investment, financial and accounting advisers to the extent that you deem it necessary, and make your own investment, hedging and trading decisions (including decisions regarding the suitability of an investment in SNCF Réseau securities) based upon your own judgment and advice from such advisers as you deem necessary and not upon any view expressed in this document.

No representation or warranty, express or implied, is made as to, and no reliance may be placed for any purposes whatsoever on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. None of SNCF Réseau, or any of its affiliates, advisers or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document.

Certain statements in this document are forward-looking, including statements concerning SNCF Réseau’s plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, competitive strengths and weaknesses, business strategy and the trends SNCF Réseau anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. By their nature, forward-looking Statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking Statements will not be achieved. SNCF Réseau does not make any representation, warranty or prediction that the results anticipated by such forward-looking Statements will beachieved, and such forward-looking Statements represent, in each case, only one of many possible scenarios and should not be viewed as the most likely or standard scenario. Such forward-looking Statements speak only as of the date on which they are made. Any opinions expressed in this document are subject to change without notice and SNCF Réseau does not undertake any obligation to update or revise any forward looking Statement, whether as a result of new information, future events or otherwise.

Not for distribution into the United States.

In the United Kingdom, this document is being distributed only to, and is directed at (a) persons who have professional experience in matters relating to investments falling within article 19(5) of the Financial Services And Markets Act 2000 “FSMA” (Financial Promotion) Order 2005 (the “Order”) or (b) high net worth entities falling within article 49 of the Order, and other persons to whom it may be lawfully be communicated or (c) qualified investors as defined in s86(7) of the FSMA (all such persons together being referred to as “Relevant Persons”). Any person who is not a Relevant Person should not act or rely on this document or any of its contents.

In France, this document will be not distributed or caused to be distributed and will not be distributed or caused to be distributed to the public in France, and any distribution of this document have been and will be made in France only to (a) providers of investment services relating to portfolio management for the account of third parties, and/or (b) qualified investors (investisseurs qualifiés), other than individuals, all as defined in, and in accordance with, Articles L.411-1, L.411-2, and D.411-1 to D.411-3 of the French code monétaire et financier.

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