Tyrrhenian Link interconnection secures final financing
Yusuf Latief
Posted on: 12 February 2024
The EIB and Terna have signed a contract for the final tranche of €1.9 billion financing of the Tyrrhenian Link.
The European Investment Bank (EIB) and Roman transmission system operator Terna have signed a contract for the final tranche of €1.9 billion ($2.1 billion) financing of the Tyrrhenian Link.
The Tyrrhenian Link, a 970km, 1,000MW double submarine cable, is a new electricity corridor at the centre of the Mediterranean connecting the Italian mainland with Sicily and Sardinia.
This final financing sees €500 million ($540 million) signed in addition to the €1.4 billion ($1.5 billion) previously disbursed via loans signed in November 2022 and March 2023.
The final tranche will support the construction and commissioning of the link’s East and West sections.
The loan aims to foster the development of renewable energy sources and grid reliability and promote energy security through the interconnector.
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Tyrrhenian Link
In Sicily, Sardinia, and especially Campania, states Terna, there is increasingly strong production from non-programmable renewable sources such as solar and wind. The Tyrrhenian Link will increase electricity exchange capacity and thus support the development and better use of renewable energy flows.
Additionally, the project is anticipated to significantly improve grid reliability while increasing the competitiveness of producers in the electricity market.
The overall project involves two sections: East from Sicily to Campania and West from Sicily to Sardinia.
The East section is 490km long and connects the Fiumetorto landing point, in the municipality of Termini Imerese in Sicily, with the landing point in Torre Tuscia Magazzeno, near Battipaglia in Campania.
The West section is approximately 480km long and connects the Fiumetorto landing point to the one in Terra Mala, in Sardinia.
With terms of around 22 years from each drawdown, the loans have a longer maturity and more competitive costs than those generally available on the market. According to the TSO, this puts them in alignment with Terna's policy to optimise its financial structure.
This operation brings total EIB financing for Terna to around €3.8 billion ($4.1 billion).
Around 50% of the project cost will be financed by the EIB.
The Tyrrhenian Link is expected to be fully operational in 2028 with some 250 companies involved in its implementation.
Originally published on smart-energy.com
