Final piece of European Investment Bank’s €1.9 billion financing puzzle for Italy’s subsea electricity link slides into place
On a mission to accelerate green electricity development, Italy’s transmission system operator (TSO), Terna, and the European Investment Bank (EIB) have inked a deal for the final tranche of the €1.9 billion financing related to the Tyrrhenian Link, which is a 970 km, 1,000 MW double subsea cable connecting the Italian mainland with Sicily and Sardinia.
In combination with the previous finance contracts of €1.4 billion – signed in November 2022 for the first tranche of €500 million and March 2023 for the second and third tranches totaling €900 million – the contract for the final tranche of €500 million will support the construction and commissioning of the east and west sections of the Tyrrhenian Link.
The signing of the latest contract took place on the sidelines of the second edition of the EIB Forum in Luxembourg, where a meeting occurred between EIB’s Vice-President, Gelsomina Vigliotti, and CEO and General Manager of Terna, Giuseppina Di Foggia, to discuss future collaboration in support of the energy transition and REPowerEU objectives.
“With terms of around 22 years from each drawdown, the loans have a longer maturity and more competitive costs than those generally available on the market. This puts them in alignment with Terna’s policy to optimize its financial structure. This operation brings total EIB financing for Terna to around €3.8 billion,” highlighted the Italian TSO.
The EIB has provided more than €58 billion in financing for projects in Italy over the last five years. The latest loan will bankroll the further development of the Tyrrhenian Link, which is expected to foster the deployment of renewable energy sources and grid reliability while promoting energy security in Italy by connecting Sicily and Sardinia with the Italian mainland via a 970 km, 1,000 MW double submarine cable.
Around 50% of the project cost will be financed by the EIB, however, Terna plans to invest around €3.7 billion in total to develop the Tyrrhenian Link’s infrastructure, perceiving the project as the key to Italy’s energy security. Some 250 companies will be involved in the project’s implementation. Prysmian and Nexans are among the players hired to supply the cables for the Tyrrhenian Link, which is slated to be fully operational in 2028.
This funding comes days after Italy’s Ministry of Environment and Energy Security gave its blessing for the Adriatic Link submarine power line, which is also set to facilitate the integration of renewable sources and support energy transition goals in Italy.
Prior to this, Terna and Steg welcomed the grant agreement for the Elmed electrical interconnection between Italy and Tunisia, which initiated the €307 million financing from the European Commission for the subsea power line between the two countries.