Italian sovereign wealth fund Cassa Depositi e Prestiti Equity (CDP Equity) has forged a deal with Italy-based oil producer Eni to establish 1GW of solar and wind generating capacity.
The joint venture, GreenIT, will be owned 51% by Eni and 49% by CDP Equity, investing a total of EUR800 million in the renewables projects by 2025. CDP Equity has tended to seek co-investments with other investors, including sovereign wealth funds, to invest in industries deemed strategic for the Italian economy.
The CEO of CDP Equity and Chief Investment Officer of CDP, Pierpaolo Di Stefano, commented: "The collaboration with Eni will make it possible to work - from a system perspective - on the development of projects with positive impacts on the territories for the production of energy from renewable sources, in order to build a model increasingly geared towards sustainability and support the country in achieving the targets defined by the Integrated National Energy and Climate Plan.''
Wind and solar enjoy a cost competitive edge over traditional power sources, spurring the development of rooftop solar plants and utility-scale renewables projects without subsidies. The government is deploying incentives to invest, including the establishment of EUR5.4 billion in subsidies in 2019-2021. It aims to establish 8GW of renewables through tenders.
Despite the government’s efforts to boost investment in renewables, there has been a lackluster response to auctions. In January, the Italian authorities awarded three solar projects in yet another under-subscribed renewables tender with wind securing the most interest. The lack of interest in solar is related to tender rules that exclude projects on farmland.
GreenIT could be able to develop power plants by utilizing government-owned property. As such, it is set to be a significant part of the development of Italian renewables, enabling CDP Equity to fulfill its mission to bolster strategic development of the country’s economy.