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The project will finance the construction and operation of a solar photovoltaic plant for a total capacity of around 137 MWp in the Italian region of Sicily.
The project contributes to the achievement of EU renewable energy objectives and supports Italy in meeting its commitments with respect to greenhouse gas emission reductions. It will also contribute to EIB's REPowerEU. The project is located in a less-developed region, within the Cohesion Priority Regions.
The project concerns the development and operation of 137 MW solar PV plant in Sicily. The project increases the renewable energy generation capacity in Italy 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 and Environmental Sustainability.
The project produces electricity from low carbon sources (a solar photovoltaic plant), 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's revenues will be supported through a two-sided contracts for differences support scheme, with a limited merchant tail.
In terms of project results, the project is expected to have a positive economic rate of return, considering the economic value of the electricity generated. The project is expected to generate a positive broader social benefit because of the value of economic externalities not being fully reflected in market prices.
The Bank will provide a meaningful part of the overall financing needs of the project through a senior debt facility to achieve construction and operation of the assets. The Bank provides expertise in structuring and lending to renewable energy projects, applying project finance principles well tested in other transactions. This will improve the structuring of the operation through close cooperation with the promoter and the commercial lenders.
The project and associated infrastructures underwent an environmental impact assessment (EIA) process according to EIA Directive 2011/92/EU (as amended by Directive 2014/52/EU), including public consultation, obtaining environmental permit in September 2021. Given reports of the risk of forced labour in the manufacturing of some solar panels, the Bank will carefully monitor the adherence to the EIB's Environmental and Social Standards. The project is expected to contribute to Climate Action and Environmental Sustainability objectives, in particular to climate change mitigation and pollution prevention and control.
The promoter is a private company and the project in this operation is market-based renewable energy projects, which do not enjoy any special or exclusive rights. Therefore, private sector procurement procedures should apply.