It hardly rained in Rome during spring and summer 2017. The low rainfall and the high temperatures meant less water for Romans, who feared the kind of water rationing already implemented in several towns in central Italy.

But summer heatwaves aren’t the only reason for the water woes. Antiquated networks cause the loss of an average 35% of water in the pipes before it reaches the tap. Upgrades are needed urgently, but small Italian water companies struggle to get financing.

So the EIB stepped in with a EUR 200 million programme loan to support investments in water and wastewater infrastructure throughout Italy. It will provide financing for four to eight water projects worth EUR 30 million to EUR 100 million each. “Small water utilities are considered too high risk for direct financing,” says Despina Tomadaki, the EIB loan officer in charge of the operation, "but the Investment Plan for Europe makes this financing possible. This is the first operation of this kind targeting small and medium-size water utilities."

Water services in Italy are regulated by the state and organised around 64 service areas. Over 2,700 operators provide services to some 7,700 municipalities. A few large players serve around 50% of the population. However, the majority of the operators are small, so it is hard for them to qualify for loans. The result: the investment gap between the work needed and the work being done in the Italian water sector has been growing for years. It is around EUR 3 billion a year today. The EIB programme loan will help reduce this gap.

Some regions of Italy are especially struggling to get financing. “The programme loan will target those companies in central and south Italy where investment needs are greatest,” says Patricia Castellarnau, the EIB economist who worked on this operation.

The programme loan is expected to support around 2,000 new jobs, further helping local populations and businesses.

By year-end, two sub-operations were signed under this programme loan: a EUR 50 million loan to Brianzacque, which operates in Monza and Brianza in the Lombardy region; and a EUR 20 million loan to AMAP, a Palermo utility.