EIB and Enel Partner on €500 Million Sustainability Loan to Strengthen Italy’s Energy Transition

EIB and Enel Partner on €500 Million Sustainability Loan to Strengthen Italy’s Energy Transition

(IN BRIEF) The European Investment Bank (EIB) and E-Distribuzione, part of the Enel Group, have signed the first €250 million installment of a €500 million sustainability-linked loan aimed at modernizing and strengthening Italy’s power grid. The agreement ties financing terms to Enel’s achievement of specific sustainability targets, including significant greenhouse gas emission reductions and alignment of capital expenditures with EU taxonomy. This partnership supports the EIB’s REPowerEU initiative, which aims to accelerate Europe’s energy transition and reduce reliance on fossil fuels. The loan underscores the role of sustainable finance in fostering decarbonization, grid resilience, and renewable energy adoption.

(PRESS RELEASE) LUXEMBOURG, 28-Nov-2024 — /EuropaWire/ — The European Investment Bank (EIB) and E-Distribuzione, a subsidiary of the Enel Group, have finalized the first €250 million installment of a €500 million sustainability-linked financing agreement. This initiative, aimed at bolstering the resilience and digital transformation of Italy’s power grid, will enhance the grid’s ability to withstand extreme climate events and improve the quality of electricity distribution services.

This innovative financing agreement is structured under the EIB’s REPowerEU program, designed to accelerate the green transition and reduce Europe’s reliance on fossil fuels. The sustainability-linked loan incorporates a unique interest rate adjustment mechanism, which depends on Enel Group meeting key greenhouse gas emission reduction benchmarks and aligning its capital expenditures with the EU taxonomy.

EIB Vice-President Gelsomina Vigliotti highlighted the significance of the collaboration: “This agreement underscores the EIB’s pivotal role as a leading financier of Enel’s decarbonisation strategy. Beyond enhancing grid stability, the loan supports Italy’s broader energy transition by curbing CO2 emissions and fostering renewable energy adoption.”

Echoing this sentiment, Enel CFO Stefano De Angelis remarked, “This transaction further solidifies the partnership between Enel and the EIB, emphasizing our mutual commitment to advancing a sustainable and resilient Europe through innovative financing. The agreement also reflects the crucial role of networks in driving the energy transition, as underscored by the major investments outlined in Enel’s 2025-2027 Strategic Plan.”

The terms of the financing hinge on Enel Group achieving specific sustainability targets. These include reducing Scope 1 greenhouse gas emissions to 125 gCO2eq/kWh or lower by 2026 and 72 gCO2eq/kWh or lower by 2030. Additionally, Enel must align at least 80% of its capital expenditures with the EU taxonomy between 2024 and 2026. Depending on progress toward these goals, the loan’s interest margin may be adjusted upward or downward.

Aligned with Enel’s updated Sustainability-Linked Financing Framework, introduced in January 2024, this loan exemplifies how sustainability is woven into Enel’s overall financial strategy. Moreover, it reinforces the objectives of the REPowerEU initiative, through which the EIB aims to mobilize €150 billion in investments by 2027 to advance Europe’s transition to clean energy sources.

This strategic collaboration demonstrates the growing role of sustainable finance in driving innovation, infrastructure modernization, and climate resilience in Europe’s energy sector.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that can contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality. In the past five years, the EIB Group has provided more than €58 billion in financing for projects in Italy.

Enel is an energy multinational and leading integrated operator in global energy and renewable energy markets. It is Europe’s largest utility company by standard EBITDA.[1]

Enel operates in 28 countries across the globe and has total energy-producing capacity of over 89 GW. It provides electricity to more than 69 million end-users via a power grid stretching over 1.9 million km.

[1] Enel’s leading position in the various categories is defined is comparison with its competitors’ data for the 2023 financial year. Fully publicly owned operators are not included.

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SOURCE: European Investment Bank