IREN ELECTRIC NETWORK UPGRADE-GREEN LOAN

Financing of 2023-2027 investments in electricity distribution networks.

The project consists of a programme including several investments in maintenance, renewal and development of the electricity distribution grids, as well as installation of new smart meters in the municipalities of Turin, Parma and Vercelli located in North-Western Italy (Piemonte and Emilia Romagna Regions). The planned investments are aimed to increase the capacity of the distribution network, maintain or increase its reliability and security of supply, and address the need for renewal of existing assets and planned developments, including advanced automation, tele-control and smart metering.

The Project concerns standard electricity network investments in a regulated natural monopoly.

The Promoter's CAPEX plan includes investments in electricity distribution and metering. The Project caters for demand growth, the connection of network users, the rollout of smart meters, the integration of renewables, and the improvement of the quality of service and the efficiency of operations.

The Project is expected to contribute to Bank's lending priority objectives on Climate Action and Environmental Sustainability (both Climate Mitigation and Adaptation), and it aligns with the REPowerEU objectives. The financing of the Project will contribute to the Bank's ELP themes on Securing the Enabling Infrastructure (energy networks) and Innovative technologies and new types of energy infrastructure (smart meters).

The operation addresses a number of market failures, including increasing security of energy supply, and the integration of low-carbon generation, which reduces carbon emissions and air pollution, with positive climate and health externalities. It is deemed to deliver good economic benefits and good social benefits. Smart technologies allow energy consumers to receive more granular and closer to real time information, thereby enabling demand response to price signals. 

EIB intervention will allow the Borrower to lengthen the tenor of its debt and to contain the cost of funding, attracting other potential lenders.

Subject to further appraisal, the investments are expected to contribute to Climate Action and Environmental Sustainability (CA&ES) objectives, including energy networks and smart meters. The project schemes are expected to have limited environmental impact and will not require an environmental impact assessment (EIA). The environmental and social due diligence will focus on the Promoter's capacity to implement the programme in line with the EIB environmental and social standards and requirements.

The Bank will require the promoter to ensure that contracts for the implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/25/EU, 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.