Summary sheet
The loan will finance a multi-year investment programme in small-scale solar photovoltaic plants (PV), across multiple sites in Italy. The PV plants total approximately 280 MWp, combined with 80 MW (4-hour) battery energy storage systems (BESS), and an additional 270 MW (4-hour) of standalone BESS.
The aim is to produce and store electricity from low-carbon sources, PV and BESS plants. As such, the project addresses the market failure of under-investment in clean energy generation due to the non-internalisation of the climate and environmental externalities. The project also supports EU Renewable Energy objectives and supports Italy in meeting its commitments with respect to renewable energy (RE) targets (65% RE by 2030) and greenhouse gas emission reductions, set out in the Integrated National Energy and Climate Plan (INECP) revised after the publication of the EU Green Deal. Solar PV plants contribute to the progression of the national and EU energy and climate goals, namely decarbonising electricity production in the EU and decreasing the reliance on fossil fuels. The project is therefore eligible under Article 309 point (c) common interest. Furthermore, certain regions where the portfolio of plants will be developed are classified as EIB Cohesion Priority Regions, thus contributing to developing less-developed regions. The investment programme is expected to be economically justified, as it will generate economic benefits, notably in terms of climate action, by stepping up investments in renewable energy, the creation of economic activity, as well as CO2 emission reductions.
The project is in line with the InvestEU Annex II eligible policy area of the development of the energy sector in accordance with the Energy union priorities, in particular the expansion of the generation of clean and sustainable renewable energy sources. It involves the development and operation of a large portfolio of solar PV and Battery Energy Storage (BESS) plants across Italy, with a presence in Cohesion Regions, supporting regional convergence and the green transition.
The operation directly contributes to Italy's 2030 National Energy and Climate Plans targets and the REPowerEU action plan, while aligning with the Bank's lending priorities in Renewable Energy, Environmental Sustainability and Climate Action (transversal).
By generating low-carbon electricity,, the project contributes to reducing carbon emissions and air pollution compared to fossil-fuel based generation. Through the battery component the project contributes to system flexibility and resilience, as well as security of supply by reducing the use of gas-fired capacity. This is a public good and subject to a market failure in reaching optimal investment levels.
The project's revenues are expected from (i) Contract for Difference under Fer-X, Italy's price support mechanism for the PV component; (ii) tolling agreements and capacity market participation for the BESS component; and (iii) the wholesale electricity market, enhancing market efficiency and competition.
The Promoter considers the Bank's contribution highly valuable due to its favourable terms and catalytic role, viewing EIB involvement as a quality label that attracts investors and co-financiers.
The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.
This investment programme will generate environmental benefits by supporting both rooftop and ground based solar PV and BESS projects that help mitigate climate change. The solar PV and BESS plants fall under Annex II of the environmental impact assessment (EIA) Directive 2011/92/EU (as amended by Directive 2014/52/EU) according to which Member States shall determine whether the installation should be subject to a mandatory EIA based on defined criteria. Impacts on the environment from Solar PV and BESS plants typically stem from noise, dust, and increased traffic during the construction phase as well as visual and land use impacts during operation. These impacts are unlikely to cause any significant negative residual effects to the environment.
The promoter has been assessed by the EIB as being a private company not being subject to EU rules on public procurement or concessions. The solar PV and BESS plants will likely be operating without exclusive or special rights within the meaning of the EU Utilities Directive 2004/17/EC and subsequent 2014/25/EU, hence private sector procurement procedures are expected to apply. Equipment and works may be purchased through a single Engineering, Procurement, and Construction contract or through several separate contracts. In the case that the EIB were to conclude that the promoter is subject to the EU public procurement legislation then the European Commission will be duly informed, which will require the promoter to apply those rules.