Credit rating agency DBRS reported on Monday that Eni, Enel, and other state-controlled Italian energy groups stand to gain from a partial allocation of European Union funds to the REPowerEU scheme.
In an analysis of Italy's utilization of 191.5 billion euros ($212.20 billion) in EU post-COVID funds by 2026, DBRS highlighted the Italian government's efforts to channel a portion of the funds towards the green energy initiative, REPowerEU.
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“We believe that the successful transfer, coupled with a potential extension of the deadline, could foster increased investments in Italian companies where the government holds significant stakes, such as Eni, Enel, Snam, and Terna. This move may facilitate a more rapid and efficient investment cycle,” stated the credit rating agency.
As of now, utilities and energy groups have received relatively modest sums from Italy's EU post-COVID funds. DBRS mentioned that power grid operator Terna received 1 billion euros, while the country's largest utility Enel was awarded 3.5 billion euros.
“Allocation of EU funds to prominent Italian energy and utility companies, possessing the requisite expertise to effectively invest these funds, may result in elevated revenues and EBITDA for these companies, yielding positive credit implications,” said Edoardo Danieli, Assistant Vice President, European Corporate Credits at DBRS Morningstar.
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Italy has set its sights on obtaining approximately 6 billion euros from the REPowerEU scheme. The country intends to supplement this amount with 3 billion euros from national funds and an undisclosed sum from its share of the EU post-COVID programme, subject to approval from Brussels.
