Leonardo and the European Investment Bank (EIB) have signed a €260 million financing contract. The “Sustainability-Linked” loan is aimed at promoting R&D and innovation (RSI) activities in the fields of helicopters, security and electronics for defence and space, along with research activities carried out by Leonardo Labs, helping at the same time to combat climate change.
This loan, with a maximum duration of 12 years and a pre-depreciation period of up to four years, provides for adjustment of the margin based on Leonardo’s attainment of certain KPIs meeting ESG objectives.
“The operation signed today is the result of an extended dialogue between the EIB and Leonardo and confirms our support for technological excellence in Italy. Since 2009, the EU bank has provided €1.26 billion to Leonardo via four agreements aimed at promoting the development of state-of-the-art dual-use products and technologies, both military and civilian, in defence, security and the space industry," said EIB Vice-President Gelsomina Vigliotti.
Leonardo CEO Alessandro Profumo said: "This funding will enable Leonardo to contribute substantially to investments with high technological content in helicopters, security, IT infrastructure, commercial electronics, space and Leonardo Labs, for the development of new cutting-edge technologies. It is the first funding operation in the aerospace and defence (A&D) sector, whose selected ESG targets include technology, specifically the increase in Leonardo’s per capita computing power, as a key enabler and booster in our research, numerical simulation, big data analytics and artificial intelligence activities. The other KPI is the reduction of CO2 emissions — said Alessandro Profumo — confirming Leonardo’s commitment to help combat climate change.’”
This financing operation will give Leonardo access to a long-term financing instrument on more favourable terms than those offered both on the banking and bond markets and will offer the flexibility required to draw down the loan within the next 15 months.
This is the fourth operation between the EIB and Leonardo: €500 million, fully reimbursed, in 2009 for the production of technologically innovative aeronautical components; the second in 2018 worth €300 million; and the third, €200 million in 2020 supporting investment projects in four areas involving the development of high-tech products in the helicopter sector, cyber security, advance manufacturing (Industry 4.0) and Cohesion investments.
The European Investment Bank (EIB) finances projects in four priority areas: infrastructure, innovation, climate and environment, and small and medium-sized enterprises (SMEs). Between 2019 and 2021, the EIB Group provided more than €36 billion in financing for projects in Italy.
The European Security Strategic Initiative aims to mobilise investments to foster Europe’s dual-use security and defence systems in support of industry and civilian infrastructure for security in Europe. Depending on demand, the initiative will provide up to €6 billion of investment for eligible projects. In line with its policy targets, the EIB is not allowed to finance basic defence investments, such as the armaments sector. European Security Strategic Initiative projects must be “dual-use” and motivated primarily by a predominantly civilian purpose.
Leonardo, a global high-tech company, is among the world’s leaders in the fields of aerospace, defence and security and Italy’s top industrial company. Organised into five business divisions, Leonardo has a significant industrial presence in Italy, the United Kingdom, Poland and the US, where it also operates through subsidiaries, including Leonardo DRS (defence electronics) and other joint ventures and holdings: ATR, MBDA, Telespazio, Thales Alenia Space and Avio. Leonardo is active on the major international markets, leveraging its leading role in technology and production (helicopters; aircraft; Aerostrutture; electronics; cyber and security solutions; and Spazio). Listed on the Milan Stock Exchange (LDO), Leonardo recorded consolidated revenues of €14.1 billion in 2021 and invested €1.8 billion in research and development. Since 2010 the company has been on the Dow Jones Sustainability Indices (DJSI), and it established itself as one of the leading global sustainability companies in 2021. Leonardo is also on the MIB (Milan Stock Exchange) ESG index.