Enel subsidiary signs first €300m tranche for e-grid project

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E-Distribuzion, an Italian energy company and a subsidiary of Enel, has signed a deal with the European Investment Bank for the provision of a €300 million ($355 million) loan to implement its e-grid project.

The €300 million is the first tranche of a “Sustainability-Linked” loan totaling €600 million ($710 million) which the EIB will provide the utility to fund its grid modernisation programme. The loan will help Enel to reach its goal of reducing direct greenhouse gas emissions (Scope 1), in line with United Nations Sustainable Development Goal (SDG) 13 (Climate Action) and the Group’s Sustainability-Linked Financing Framework

E-Distribuzion will use the loan to launch its e-grid project designed to renew the power grid and ensure that an increasing amount of distributed renewable energy resources are integrated, a measure that will drive decarbonisation of energy generation. This will enable the utility improve the grid’s climate resilience and help Italy move a step closer to its carbon emissions reductions goals and to align with decarbonisation goals set by the European Commission in its Green Deal.

Moreover, E-Distribuzion will be able to deploy advanced and innovative technologies to enhance the management and operation of the grid, as well as introduce a series of innovative customer offerings.

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“Most of the investments, especially the ones for improving quality of service will benefit Cohesion regions,” according to a statement issued by the EIB.

The e-project will include:

  • The installation of new and extension of existing high to medium voltage substations and the installation of new overhead lines of up to 150KV
  • The rehabilitation of underground medium voltage networks and substations
  • The installation of remote control and automation technologies.

Both the EIB and the utility expect the return on investments of the projects to be massive on social, economic and environmental aspects.

Miguel Morgado, Director of the European Investment Bank for lending operations in Italy, Malta, Croatia, Slovenia and the Western Balkans, said: “This transaction marks a big step for the EIB as part of its roadmap to become the EU’s ‘climate bank’.

“From 2025, at least half of our lending is required to positively impact the climate, while all EIB transactions from this year onwards are aligned with the objectives of the Paris Agreement. Thanks to the synergy with Enel, leveraging on its leadership and know-how in Sustainable Finance, this loan is fully in line with our goals of combating climate change. This transaction also plays a major role in supporting the post-pandemic economic recovery and its impact on employment. Given that 70% of the investment arising from the loan will be carried out in southern Italy, this is a further indication of the significance of the co-operation between Enel and the EIB.”

Enel CFO Alberto De Paoli, adds: “The evolution of sustainable finance will support long-term growth and a just transition in Europe, by means of an acceleration of sustainable investments, in line with the Paris Agreements and the achievement of the United Nations Sustainable Development Goals: this is an unprecedented opportunity for both private and public institutions to mobilise sustainable capital via the use of sustainability-linked instruments, therefore achieving our ambitious climate targets.”

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Nicholas Nhede is an experienced energy sector writer based in Clarion Event's Cape Town office. He has been writing for Smart Energy International’s print and online media platforms since 2015, on topics including metering, smart grids, renewable energy, the Internet of Things, distributed energy resources and smart cities. Originally from Zimbabwe, Nicholas holds a diploma in Journalism and Communication Studies. Nicholas has a passion for how technology can be used to accelerate the energy transition and combat climate change.