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The project will finance investments in electricity networks and renewable energy for 2025-2028.
The aim is to contribute to progress on the national and EU energy and climate goals, namely helping to decarbonise electricity production in the EU and to decrease the reliance on fossil fuels. The project will also contribute to improve the network resilience to adverse climate events and the overall stability and reliability of the distribution system. Some of the plants are located in EIB Cohesion Priority Regions, and contribute to developing less-developed regions.
The Project is in line with the InvestEU objective of the development of the energy sector in accordance with the Energy Union priorities.
The Project contributes to the national, EU, and EIB own objectives on environmental protection, climate and long-term energy decarbonisation. It increases the renewable energy generation capacity in Italy, expands and strengthens the electricity distribution network and contributes to national and EU 2030 climate objectives.
The financing of this Project is in line with the Bank's lending priority objectives on Renewable Energy as well as on Climate Action & Environmental Sustainability as well as Social & Economic Cohesion. The Project produces electricity from low carbon sources (onshore wind plants), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and other air pollution (compared to fossil-fuel generation).
The Project is expected to rely partly on revenues from a contract for differences (a competitive auction organized by the Italian government), and partly on selling to the wholesale market or via corporate PPAs, in a sector characterised by incomplete markets (limited forward/hedging, lack of scarcity pricing and lack of locational pricing), improving market efficiency and competition. The Project is expected to yield very good quality and results due to a very good rating of the economic rate of return, broader social benefits and fair employment creation. The Promoter is considered capable of implementing and operating the Project.
The EIB support is expected to accelerate the implementation of the Project by lowering the associated cost of funding beyond those usually proposed by other financiers. Furthermore, it increases the diversification of the funding sources and improves the maturity profile, allowing the Promoter to expand investments more easily. The EIB package offers customised terms currently not available from the market, including flexible drawdowns and a longer grace period, fixed interest rate and availability period for disbursements. The value added of the EIB financial contribution is tangible under current market conditions, also considering the magnitude of the funds needed for Project implementation. EIB participation in the Project flags to the market the Promoter's creditworthiness and viability, which could translate in more competitive financing conditions from third parties.
The EIB would not be able to provide such type of financing support during the period in which the EU guarantee can be used, or not to the same extent, without InvestEU.
The individual electricity generation plants and most of their ancillary infrastructure fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU amended by the Directive 2014/52/EU, requiring the competent authorities to determine the need for an EIA. Only two out of the seven renewable energy plants underwent a full EIA process, while the remaining five were screened out by the competent authorities. Some of the electricity distribution schemes may fall under Annex II of the aforementioned Directive. Overhead transmission and distribution lines, if falling under the Annex I due to their technical characteristics, will be expected to undergo an EIA process. Most solar PV and wind projects are fully permitted, while the remaining projects are at advanced development stage. The environmental and social due diligence will follow the programme lending approach according to the EIB's procedures and standards. It will focus on the Promoter's capacity to implement the programme in line with the EIB environmental and social standards and requirements. Where and if applicable, and based on a risk-based approach as defined in the EIB Group Environmental and Social Policy, the requirements of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be checked during appraisal.
The promoter to ensure that contracts for implementation of the project have been / will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU where applicable, as well as Directive 92/13/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. Information on awarded main suppliers/contractors for the implementation of the envisaged operation is not available.