UNICREDIT CLIMATE ACTION FL ITALY

Framework loan to support a pipeline of small to medium-sized renewable energy, energy efficiency and biomethane projects in Italy.

The loan will support the development of renewable energy projects in Italy, contributing to renewable energy targets in the country and consequently in the European Union.

The EIB investment in the project will support the construction of new renewable energy (RE) capacity in Italy, crucial for the achievement of the 2030 targets set out in the final National Energy and Climate Plan.

In addition, as the majority of the RE investments (around 70%) are located in EIB Cohesion Priority Regions, the Bank also contributes to economic and social cohesion in rural areas with unemployment rates above the EU average and scarce employment opportunities.

The promoter will play the role of aggregator for small energy projects. Therefore, this operation addresses the market failures that limit access to finance to small renewable energy projects, despite the pivotal role they play in contributing to EU energy policy objectives and in the decarbonisation strategy to achieve Paris goals.

Moreover, as the Wind and solar PV projects produce electricity from low carbon sources they address the market failure of negative climate and environmental externalities, through the reduction of carbon and air pollution (compared to fossil fuel generation).

Similarly, the production of biogas for direct grid injection will contribute to the transition to low-carbon gas and thereby reducing carbon externalities, which is a significant challenge to the industry, and the progressive replacement of natural gas or liquid fossil fuel in transportation. The use of agricultural and animal husbandry waste and the organic fraction from solid urban waste as feedstock for the production of biomethane contributes to the circular economy objective. The operation will also contribute to the pollution prevention and control objective given that it will enable the shift from polluting (fossil fuel) to non-polluting or less polluting energy production.

The EIB financing accelerates the implementation of the underlying projects as it contributes to their bankability by lowering their cost of funding and offering a tenor longer than the one usually proposed by other financers. The EIB support to the project will also contribute to crowding-in other financers, sending a positive signal to the market regarding soundness of the underlying schemes.

The investments will generate environmental benefits in terms of reduction of air pollutants and greenhouse gas (GHG) emissions, ultimately helping to mitigate climate change. They are expected to have limited social and environmental impacts and any such impact is expected to be mitigated. The Bank will assess the capacity and procedures of the financial intermediary to ensure compliance with the national and European legislation.

The majority of the schemes are expected to be developed by private entities/promoters that are not subject to EU Procurement Directives. For those schemes where public procedures would apply, the financial intermediary will be required to confirm that procurement is carried out in line with the requirements for public sector projects under the relevant national and EU legislation.