SNAM CLIMATE ACTION FL

Promoter – Financial Intermediary

SNAM SPA

Location

• Italy

Description

Framework loan to support a pipeline of energy efficiency projects in Italy, mainly in residential buildings.

Additionality and Impact

The proposed operation aims to finance energy efficiency ("EE") projects in Italy, mainly in residential buildings, therefore supporting EU's and Bank's priority in the energy sector and the EIB's climate action objectives.

Through energy savings, energy efficiency projects reduce carbon emissions and air pollution, increase comfort and air quality in the dwellings, social and public benefits that are not fully internalized by private investors.

Through the technical discussions with the promoter, the project has been shaped to focus its scope in 100% EU's Taxonomy aligned projects , and particularly in the development of energy efficiency project in residential buildings as well as industrial facilities. Therefore the project will be fully aligned with EU's priorities and goals established in the European Green Deal and particularly in the Renovation Wave. EE investment in residential buildings suffer from a chronical lack of investments. The project shows how to upscale and industrialize EE in residential buildings trough aggregators (energy service companies (ESCOs) and utilities) and how EIB can be additional to the national incentives for EE like the tax deductions the Italian government has launched for EE project in buildings. In addition, given the labour-intensive nature of the building sector, largely dominated by local businesses, renovation of buildings also plays a crucial role in job creation and in the recovery of the COVID-19 pandemic, supporting the Italian government recovery plan, in response to current market turmoil generated by the CoViD-19 pandemic.

The EIB support to this operation is expected to provide a tangible value added, contributing to accelerate the implementation of the underlying EE schemes, by lowering the associated cost of funding and offering a maturity beyond the tenor usually offered by commercial banks as well as disbursement mechanics more flexible and interest rates options wider than those normally proposed by the market.The proposed loan structure is innovative for the counterpart, as it is the first time the borrower enter into a "framework loan" financing type with the EIB, with funds allocation and disbursement mechanics designed to support a wide pipeline of small to medium sizes projects.The EIB support to this operation is expected to have also an impact on mobilising other financers. Indeed, the Bank's commitment to support the project for such a relatively tenor long tenor is perceived by the market as a confirmation of its soundness and the long-term financial reliability of the borrower.

Objectives

By supporting energy efficiency investments in Italy, mainly the renovation of condominium buildings, the project will reduce carbon and air pollution, deliver health benefits through improved air quality and positive social impact through job creation and an improvement of the purchasing power of EU households.

Sector(s)

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

Proposed EIB finance (Approximate amount)

EUR 150 million

Total cost (Approximate amount)

EUR 200 million

Environmental aspects

The project is in line with the Bank's priority lending objectives for energy efficiency (EE) and renewable energy (RE) and supports the Climate Action objective (100%). Given the scale, location and nature of the sub-projects in built-up urban areas an environmental impact assessment (EIA), as defined under the EIA Directive 2014/52/EU, amending the 2011/92/EU, is normally not required.

Procurement

No procurement issues.

Status

Signed - 15/06/2021