InvestEU: € 3.4 billion in resources are on the way for the modernisation of the Palermo-Catania railway line

Rome, 14 March 2023

€ 3.4 billion in resources are on the way for the modernisation and expansion of 178 km of the Palermo-Catania railway line. This is the amount that will be made available to the Sicilian infrastructure thanks to the agreement presented this morning to the Ministry of Infrastructure and Transport by Deputy Prime Minister Matteo Salvini, the Vice-President of the European Investment Bank (EIB), Gelsomina Vigliotti, the Chief Executive Officer of Ferrovie dello Stato Italiane, Luigi Ferraris, the Deputy Director General for Mobility and Transport of the European Commission, Herald Ruijters, the Chief Executive Officer of CDP, Dario Scannapieco, and the Chief of the IMI Corporate & Investment Banking Division for Intesa Sanpaolo, Mauro Micillo.

This innovative financial operation in Italy’s infrastructure sector combines direct financing to the State (at favourable lending conditions) with support for credit institutions, which, with the release of the guarantees envisaged in the credit lines for the work activities, play a fundamental role in facilitating the implementation of large-scale infrastructure projects, such as the Palermo-Catania railway line. 

In particular, the agreement provides for:

• a direct loan of € 800 million from the EIB to the Ministry of Economy and Finance (MEF), the first tranche of which, amounting to € 200 million, has already been stipulated;
• a counter-guarantee instrument, also by the EIB, provided in conjunction with Ferrovie dello Stato Italiane, for an amount of € 1.3 billion, in favour of financial intermediaries. Of these, the first € 500 million was assigned to Intesa Sanpaolo - the bank that pioneered the project by contributing to the creation of the instrument scheme - and € 300 million to CDP, while the remaining € 500 million will be allocated to other financial intermediaries at a later time. This instrument has no precedents in the EIB’s operations, and is aimed at counter-guaranteeing the contractual guarantees that the financial institutions will issue in favour of Rete Ferroviaria Italiana SpA in the interests of the eligible parties and the contractors to whom the projects will be assigned. The 50% counter-guarantee will allow financial institutions to generate guarantees equal to twice the EIB’s commitment: therefore, there will be € 2.6 billion in guarantees available for the implementation of the construction contracts and the start of the relative work activities. This figure is in addition to the € 800 million in direct financing to the MEF, resulting in a total value of € 3.4 billion towards the modernisation of the Palermo-Catania railway line.
   

The counter-guarantee intervention in support of the € 1.3 billion EIB guarantee is supported by InvestEU, the European Union programme aimed at implementing € 372 billion in investments by 2027, of which EIB Group is the main implementing partner. The financial structure of the operation will facilitate the implementation of the work activities thanks to the counter-guarantee provided to the financial institutions involved, and its effect of amplifying the credit support offered to the companies involved in the construction of the railway infrastructures. This is in addition to the € 1.4 billion loan that will be disbursed under the PNRR in support of the investments for the Palermo-Catania railway line.

These resources will contribute to the modernisation and upgrading of 178 km of the Palermo-Catania railway line between Fiumetorto and Bicocca, which links the northern and eastern urban coastal areas of Sicily with the Region’s interior. The infrastructure is part of the Scandinavian-Mediterranean Corridor of the Trans European Transport Network (TEN-T). The both freight and passenger trains will travel at a maximum speed of 200 km/h, helping to reduce journey times along the route by approximately 60 minutes, and connecting the two metropolitan cities with direct trains in just 2 hours, as opposed to the current 3 hours. The project will contribute to the economic and social development of the region, and will promote the development of sustainable mobility.

“The citizens expect concrete results, and we have a duty not to disappoint them. We are committed to making up for lost time, speeding up the work activities, and guaranteeing efficient railway connections in Sicily. These connections will be especially useful in light of the Government’s renewed commitment (after decades) to building the bridge between the island and Calabria,” explains Minister Salvini.

“The TEN-T network, of which Palermo-Catania is part, aims to promote the single European market, helping to reduce the environmental impact of the means of transport, while at the same time improving their safety and energy efficiency,” says EIB Vice-President Gelsomina Vigliotti. “As a Bank that's committed to the climate, the EIB has supported the development of the railway and high-speed rail systems in Italy with over € 13 billion since 1998, helping to improve railway connections throughout the country, and promoting social cohesion and the transition to more sustainable mobility”.

The Commissioner for the Economy, Paolo Gentiloni, added: “The European Union continues to support major investments in Italy's rail network. With today’s agreement, the European Investment Bank, supported by InvestEU, will complement the significant financing already committed through NextGenerationEU to upgrade the Palermo-Catania railway line. This project is of huge importance for the island: it will provide Sicilians with faster and greener transportation between their two major urban centres, stimulating economic development and job creation. I am proud of the key role that Europe is playing in making it a reality.”

The Commissioner for Transport, Adina Vălean, said: "This large-scale investment will enable great steps to be taken towards completing the trans-European transport network (TEN-T), increasing the connectivity in Sicily and directly benefiting its citizen and businesses. We want to double high-speed rail traffic by 2030, as we set out in our Sustainable and Smart Mobility Strategy. This initiative supports that ambition. It also showcases the complementarity between the EU transport policy and the EU financial tools: InvestEU and the PNRR."

The CEO of Ferrovie dello Stato Italiane, Luigi Ferraris, said: “We are delighted with the EIB's commitment to providing financial support for projects to modernise and upgrade our railway infrastructure, and its specific focus on the south and Sicily. The commitment of the EIB, the MEF, the MIT, and all the signatories to this agreement,” Ferraris added, “strengthens the commitment of the companies in the FS Group, such as Rete Ferroviaria Italiana, which are implementing the projects provided for in the PNNR, the Government Programme Contract, and our business plan, which covers over € 110 billion in this sector.”

The CEO and General Manager of CDP, Dario Scannapieco, said: “Today's initiative is an example of how public-private synergies can really help to bridge the infrastructure gap in our country. During this phase of regeneration and modernisation, which has also been stimulated by PNRR resources, Cassa Depositi e Prestiti continues to play a leading role in the implementation of strategic projects that have a sustainable impact on the environment and the economy, improving people’s daily lives.”

Chief of IMI Corporate & Investment Banking Division at Intesa Sanpaolo, Mauro Micillo, added: “The development of modern, safe and connected infrastructure is central to the sustainable and lasting growth of the entire country, and in particular to the regeneration of the south of Italy. With this in mind, Intesa Sanpaolo Group has always been committed to supporting the business world and institutions to help strengthen the infrastructure network. The IMI Corporate & Investment Banking Division has worked alongside the EIB to prepare the procedures, contracts and operational mechanisms for this innovative instrument, which is a way for EIB to provide tangible support for the application of the Recovery and Resilience Fund with a novel product, not just in Italy, but in Europe as well. Intesa Sanpaolo Group thus confirms its role as a driver of innovation in the dialogue between the public and private sectors, supporting the sustainable economic and industrial development of our country, and has no doubt that this mechanism, which has been designed to facilitate the implementation of large-scale infrastructure projects, will be replicated and may become a standard of success in the world of strategic green infrastructure projects.”