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EIB 500 Million Euro Loan to Support Italian Submarine Cable Project

The European Investment Bank (EIB) has signed a 500 million euro ($504 million) financing contract with Italian grid operator Terna SpA. The funding will be used for the eastern section of the Tyrrhenian submarine cable project linking Sicily and Campania.

Terna SpA and EIB

Tyrrhenian Submarine Cable Project

Tyrrhenian aims to connect Sicily to Sardinia and the Italian peninsula via a 970 km, 1,000 MW DC submarine cable. It will facilitate the development of renewable energy sources, grid reliability and energy security.

The whole project consists of two parts: the eastern section from Sicily to Campania and the western section from Sicily to Sardinia. The eastern section is 490 km long and connects the Fiumetorto landing site in the city of Termini Imerese, Sicily, to the Torre Tuscia Magazzeno landing site near Battipaglia, Campania. The western section is about 480 km long and connects the Fiumetorto landing site with the landing site of Terra Mala in Sardinia.

In Sicily, Sardinia and especially in Campania, the production of renewable, solar and wind energy is significant and increasing. The Tyrrhenian submarine cable line will increase the electricity exchange capacity and thus support the development and better utilization of renewable energy streams.

The landing point for the project’s underwater cable will be completed using horizontal directional drilling (HDD). This is a linear drilling technique that will avoid open excavation on the beach. Its integration into the national transmission grid will be achieved through a DC to AC converter station and a switching station with short connections to existing power lines.

Tyrrhenian Submarine Cable Project

EIB Approves Loan for Tyrrhenian Connection Project

The loan is the first tranche of a €1.9 billion loan approved by the European Investment Bank for the Tyrrhenian Link project. Terna plans to invest around €3.7 billion in the construction of the Tyrrhenian submarine cable.

About 250 companies are expected to participate in the project and bring development to the region concerned. Previously, Elettra, a subsidiary of Orange Marine, has been selected by Infratel Italia to supply and install a new submarine cable connecting 21 islands in Italy.

This loan has a term of 22 years and a cost that is more competitive than the average loan in the market. It is in line with Terna’s policy of optimizing its financial structure. This operation brings the total amount of EIB financing for Terna to 2.6 billion euros. The remaining €1.4 billion is for other Tyrrhenian connection projects already approved by the Bank.

The first phase of the project is to connect the Italian peninsula to Sicily. This eastern section of the submarine electric line is expected to be operational in 2025. Its western section then connects to the island of Sardinia. The infrastructure will be fully operational in 2028.

As world leaders gather in Egypt for COP27, EIB Vice President Gelsomina Vigliotti said the EIB is pleased to have signed the first tranche of 500 million euros to support the construction of the Tyrrhenian connection. This infrastructure is of great strategic importance to ensure Italy’s energy security, reduce CO2 emissions and promote the development of renewable energy sources.