HERA ENVIRONMENTAL SUSTAINABILITY

The project will finance HERA's investments in Northern Italy, mainly in the Emilia-Romagna region, in the period 2023-2028.

The aim is to support the promoter's infrastructure investments, particularly in the following sectors: - water and wastewater (water and wastewater treatment plants, networks and pumping stations); - waste management (mainly for the separate collection of municipal waste, recycling plants and hazardous waste treatment); - equipment and energy (district heating, renewable energy and electricity distribution).

The Project consists of HERA's (Holding Energia Risorse Ambiente) SpA ("the "Promoter") multi-scheme investment programme in the energy, water and wastewater and solid waste sectors in four Italian regions: Piedmont, Emilia Romagna, Veneto and Friuli Venezia Giulia.

The waste components aim to improve the solid waste management to reach compliance with Italian and EU solid waste management target. It will contribute to the circular economy transition, in line with the Commissions Circular Economy Action Plan and to decarbonisation of material and waste management, in line with the European Green Deal. The waste It meets the Bank's objective of Waste management and treatment which contributes to Public Policy Goal of Sustainable Energy & Natural Resources and the sub-objectives of Waste Management and Treatment and a Transition to a Circular Economy.

Waste management is a service of general economic interest, not adequately supplied by market forces alone. The waste components support the delivery of this non-excludable and non-rivalrous service by providing improved separate collection infrastructure and recycling and treatment facilities required to meet statutory targets. The waste components will generate positive externalities in the form of increased material and energy recovery and reduced emissions from waste management, resulting in overall net reductions of GHG emissions with significant climate change mitigation impact.

The Project will support investments in water and wastewater infrastructure. In doing so, it will ensure compliance with key European regulations in the water sector and improve the quality and resilience of water and wastewater water services. The Project will contribute to the Bank's policy objectives of Sustainable Energy and Natural Resources as well as Climate Action and Environmental Sustainability. The Project will address a number of market failures, including those associated with public goods, unaccounted for externalities and information failures, generating positive health and environmental benefits, which would not be realised to the same extent without public intervention. The Project will also contribute to improving the efficiency of the potable water supply system while increasing its resilience against climate related risks. These benefits are not reflected in market prices and would not be realised to the same extent without public intervention.

The energy component of the CAPEX plan includes investments in district heating, photovoltaic energy, electricity distribution and metering. The programme will contribute to Bank's lending priority objectives on Climate Action and Environmental Sustainability and aligns with the REPowerEU objectives. It also aims to maintain or increase the quality of service of the public services. The financing of the programme will contribute to the Bank's ELP themes on Securing the Enabling Infrastructure (energy networks), Decarbonising energy supply (RE and non-RE), Innovative technologies and new types of energy infrastructure (smart meters). The energy components of the operation address a number of market failures, including reducing carbon and air pollution externalities, increasing security of energy supply by reducing dependency on energy imports or reducing the risk of black outs, meet existing and future heating demand improve energy efficiency by reducing overall electricity consumption.

The EIB support is expected to bring a tangible value added by lowering the Project's cost of funding and offering a tenor longer than the one normally proposed by other financers. Considering the magnitude of the Project's funding needs, it is expected that the EIB support will contribute to accelerate its implementation. 

Water and wastewater The investment aims to upgrade water and wastewater infrastructure bringing positive environmental impacts. Compliance with the EU Water Framework Directive (2000/60/EC), Urban Waste Water Treatment Directive (91/271/EEC), and EU and national environmental legislation, notably under the Environmental Impact Assessment (EIA) Directive 2011/92/EU as amended by the Directive 2014/52/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC) will be verified during appraisal. It will also contribute to Climate Action and Environmental Sustainability (CA&ES) objectives, in particular to climate adaptation and sustainable use and protection of water and marine resources. Waste The waste components will mainly include components aimed at increasing recycling and separate collection of waste, thus contribute to a circular transition, saving raw material and reducing waste disposal and incineration. Environmental aspects, including the need for EIAs for other project components, will be assessed at appraisal. The waste components are to a large degree expected to contribute to CA&ES objectives. Energy For the energy component, photovoltaic (PV) plants and district heating components fall under Annex II of the EIA Directive 2011/92/EU (as amended by Directive 2014/52/EU), requiring the competent authorities to determine whether an EIA is required. Compliance with applicable EU Directives needs to be ensured, in particular concerning cumulative impacts and potential impacts on nature conservation sites. Environmental aspects, including the need for EIAs for other project components, will be assessed at appraisal. Subject to further appraisal, energy components are expected to contribute to CA&ES objectives, potentially including energy networks, smart meters and PV.

The promoter has to ensure that contracts for the implementation of the project have been or will be tendered in accordance with the relevant applicable EU procurement legislation, Directive 2014/23/EU where applicable and/or 2014/24/EU where applicable and/or 2014/25/EU where applicable, as well as Directive 92/13/EEC and Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.