EDP monitors the value of the Cash-Flow at Risk (CfaR) of its different positions on an ongoing basis, namely in what concerns to fuel acquisitions, CO₂ licences, comparing and adjusting their values to the limits established by the Executive Board of Directors. The Risk Management Department and the Trading unit internally developed a new technology to systematically back test the current model, which will integrate MUR, the new system under development to the Trading Unit, MUR - Single Model for Market Risks' Quantification.

 

The market risk of the liberalised clients is monitored in order to systematically evaluate the Cash Flow at Risk, considering the consumption patterns and the market prices' volatility. The obtained information is afterwards included on the prices and maturities to apply in future contracts or in the renewal of existing ones.

 

The Risk Metrics methodology is used to thoroughly quantify the group's debt. This methodology allows EDP to execute a monthly mark-to-market valuation of the Group's debt. For the persecution of the analysis it is used the historical, parametrical or Monte Carlo method, which generates a role of features associated with debt portfolio's volatility. The systematic tests allow the company to monitor the effect of a stringent and prudential use of derivatives on the volatility levels of EDP's, EDPFinance BV's and HidroCantábrico's debt.

 

Operational risks in the various business units and across the Group as a whole are monitored through the Risk Portal. These include process risk, quality risk, performance gap, IT risks, etc...