TEA GROUP WATER INVESTMENTS

Promoter – Financial Intermediary

TERRITORIO ENERGIA AMBIENTE MANTOVA SPA

Location

• Italy

Description

Investments in the integrated water sector in the territory of the Province of Mantova, Italy.

Additionality and Impact

The project supports investments in water and wastewater infrastructure by a publicly owned utility providing Integrated Water Services in the Lombardy Region, Italy. It ensures compliance with key European regulations in the water sector, and improves the coverage and quality of integrated water services. The project contributes to the Bank's policy objectives of Sustainable Energy and Natural Resources as well as Climate Action and Environmental Sustainability. It addresses a number of market failures through positive externalities in the form of environmental and public health benefits, notably improved quality of recipient waters and reduced greenhouse gas emissions from wastewater infrastructure. These benefits are not reflected in market prices and would not be realized to the same extent without the EIB intervention.

Furthermore, the project addresses a chronic investment gap in water services in Italy and provides long-term finance at attractive terms compared to traditional banking funding.

The EIB financing will allow the Borrower to improve its cost of funding, diversify its funding sources and lengthen the term of its financial debt, as commercial banks are not able to provide corporate lending with comparable tenor, grace and availability period, hence implying effective "time-subordination" of the EIB loan vis-à-vis other lenders.

As TEA Group will raise additional financing in the next 3 years to support their ambitious investment programme (potentially either from the banking system, and from the capital markets), the presence of the EIB loan may likely have positive impact on the confidence of other financiers.

 

Objectives

The project aims at supporting investments in water and wastewater infrastructure, in order to improve the coverage, quality and resilience of integrated water services in the province of Mantova, Lombardy Region. The underlying investments will bring operational efficiency improvements (e.g. reduction of water losses, increased energy efficiency, better resilience to extreme weather events) and generate substantial social benefits by improving the environment and public health in the region, as well as increasing employment opportunities.

Sector(s)

• Water, sewerage - Water supply; sewerage, waste management and remediation activities

Proposed EIB finance (Approximate amount)

EUR 60 million

Total cost (Approximate amount)

EUR 126 million

Environmental aspects

The investments are expected to have positive net environmental and social impacts, considering their focus on compliance with, amongst others, the Urban Waste Water Treatment Directive 91/271/EC, the Water Framework Directive 2000/60/EC, and their contributions to resource efficiency from efficiency improvements. Where and if applicable, the requirements of the Environmental Impact Assessment Directive 2014/52/EU amending the Directive 2011/92/EU, Birds Directive 2009/147/EC and Habitats Directive 92/43/EEC will be verified during appraisal.

Procurement

The Bank will require the utilities to ensure that contracts for implementation of the project have been or will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/23/EU where applicable and/or 2014/24/EU where applicable and/or 2014/25/EU where applicable, as well as Directive 92/13/EEC and Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.

Status

Signed - 22/04/2022