MILAN (Reuters) - Eni, Enel (BIT:ENEI) and other state-controlled Italian energy groups are due to benefit from a partial transfer of European Union funds to the REPowerEU scheme, credit rating agency DBRS said on Monday.
In a report analysing Italy's challenges to spend 191.5 billion euros ($212.20 billion) of EU post-COVID funds by 2026, DBRS noted that the Italian government was trying to shift some of that money to the green energy initiative dubbed REPowerEU.
"We believe this transfer along with a further extension to the deadline, if successful, would lead to more investments flowing through to Italian companies where the government has a significant stake, such as Eni, Enel, Snam, and Terna, and allow for a more rapid and efficient investment cycle," the credit rating agency said.
So far, utilities and energy groups have received relatively small amounts from Italy's EU post-COVID funds, DBRS said, mentioning the 1 billion euros and 3.5 billion euros respectively awarded to power grid operator Terna and the country's biggest utility Enel.
"EU funds allocated to the large Italian energy and utility companies that have the required expertise to efficiently invest these funds could lead to an increase in these companies' revenue and EBITDA, with consequent positive credit implications," said Edoardo Danieli, Assistant Vice President, European Corporate Credits at DBRS Morningstar.
Italy hopes to draw some 6 billion euros from the REPowerEU scheme, and wants to top it up with 3 billion euros from national funds and a yet-to-be-announced figure from its share of the EU post-COVID programme, subject to approval from Brussels.
($1 = 0.9024 euros)