UNICREDIT CLIMATE ACTION FL ITALY II

Promoter – Financial Intermediary

UNICREDIT SPA

Location

• Italy

Description

Framework loan to support small and medium scale investments in renewable energy, contributing to the climate action-mitigation objective.

Additionality and Impact

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. Most of the underlying projects will benefit from market based instruments, and thereby will contribute to the policy objective to support the market integration of renewable energy projects.

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 project quality and results for this operation are deemed to be very good mainly due to to the high social benefits expected by generating clean and renewable power at a lower cost compared to the fossil-fuel based alternatives in the country.

Furthermore, the EIB support to the project will contribute to their bankability by lowering their cost of funding and offering a tenor longer than the one usually proposed by other financers.

Objectives

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.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 150 million

Total cost (Approximate amount)

EUR 300 million

Environmental aspects

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.

Procurement

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.

Status

Signed - 20/10/2022