This document and its contents are not subject to any approval or endorsement from ESMA or any other competent authority
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General information
Date of the publication of the European Green Bond factsheet: 14 July 2025
Legal name of the issuer: TERNA - Rete Elettrica Nazionale S.p.A. (Terna S.p.A. or Terna)
LEI of the issuer: 8156009E94ED54DE7C31
Investor Relations contacts: https://www.terna.it/en/investors/contacts-ir
Name of the bond assigned by the issuer: [●]
ISIN of the bond: [●]
Planned issuance date or period: European Green Bonds issued as from DDMM 2025
Identity and contact details of the external reviewer:
S&P Global Ratings Europe, Part 4th Floor, Styne House, Upper Hatch Street, Dublin 2 IrelandWebsite: https://www.spglobal.com/ratings/en/index
Competent authority that has approved the bond prospectus(es): Commissione Nazionale per le Società e la Borsa (CONSOB) as competent authority under Regulation (EU) 2017/1129.
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Important information
This bond uses the designation 'European Green Bond' or 'EuGB' in accordance with Regulation (EU) 2023/2631 of the European Parliament
and of the Council1.
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Environmental strategy and rationale
Terna intends, after the full allocation of an amount equal to the proceeds of this European Green Bond, and at least once during the bond lifetime, to draw up and make public EuGB impact report(s) on the environmental impact of the use of the bond proceeds, in accordance with Article 12(1) of Regulation (EU) 2023/2631. Terna intends to have such impact report(s) reviewed by an external reviewer, in accordance with Article 12(3) of Regulation (EU) 2023/2631.
Overview
As the owner and operator of the Italian high-voltage electricity transmission grid, Terna plays a pivotal role in the energy transition, facilitating the integration of renewable energy sources and enhancing the grid resilience. Fully in line with the objectives outlined in the 2024-2028 Industrial Plan update, Terna aims at issuing multiple EuGBs and use the proceeds to finance and refinance, in whole or in part, existing and future projects, including the development of sustainable infrastructure and the advancement of Italy's decarbonization goals.
The eligible green projects pursue the EU environmental objectives of Climate Change Mitigation as referred to in Article 9 of Regulation (EU) 2020/852, they are all related to Climate Delegated Act '4.9 Electricity transmission and distribution activities', they meet the technical screening criteria set forth in the Climate Delegated Act, and they are in line with the minimum safeguards criteria, pursuant to Article 18 of the aforementioned Regulation.
Link with the assets, turnover, CapEx, and OpEx key performance indicators
The proceeds of the bond will be entirely allocated to taxonomy-aligned capital expenditures. In this regard, Terna intends to maintain the same high proportion of ratio of taxonomy-aligned assets (as a percentage of total assets), taxonomy-aligned CapEx (as a percentage of total CapEx) and taxonomy-aligned turnover (as a percentage of total turnover) as reported below:
KPI
Share of Eligible Activities
Share of Aligned Activities
Turnover
99%
86%
CapEx
100%
99%
OpEx
100%
95%
1Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023 on European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and for sustainability-linked bonds (OJ L, 2023/2631, 30.11.2023, ELI: https://http://data.europa.eu/eli/reg/2023/2631/oj).
For more information about Terna Group's assets, turnover, CapEx and OpEx key performance indicators please see the section referring to taxonomy eligible and taxonomy non-eligible activities found in the 2024 Annual Report, on page 227 (available here).
Link to Terna's 2025-2034 Development Plan
The proceeds will support the implementation of Terna's 2025-2034 Development Plan, focusing on the quality, efficiency and safety of an increasingly sustainable national transmission grid for Italy, in step with the new challenges of energy transition. Terna's 2025-2034 Development Plan calls for an investment programme of over Euro 23 billion over the 2025-2034 ten-year horizon, with a total value of up to Euro 40 billion beyond the ten-year time horizon. The projects planned by the Transmission System Operator are intended to ensure grid efficiency and resilience, service sustainability, security and quality, as well as the integration of production from renewable sources.
Terna mentions the information about its Development Plan in the following documents:
2024 Annual Report (available here);
Terna Green Bond Framework (available here);
Terna's Grid Development Plan (available here).
Securitisation
This bond is not a securitization bond.
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Intended allocation of bond proceeds
Intended allocation to taxonomy-aligned economic activities
n.a.
Intended allocation to specific taxonomy-aligned economic activities
Terna intends to allocate an amount equal to the proceeds in accordance with the gradual approach, as referred in Article 4(1) of Regulation (EU) 2023/2631, and before maturity proceeds shall be allocated in accordance with EU Taxonomy requirements.
An amount equal to 100% of proceeds will be allocated to economic activities that are environmentally sustainable under Article 3 of the Regulation (EU) 2020/852, according to the methodology set out in the allocation report, that will be published annually until the full allocation of the bond proceeds and subject to external verification by an independent reviewer, in accordance with Article 11 of Regulation (EU) 2023/2631.
All eligible green projects target the EU environmental objective of Climate Change Mitigation.
Proceeds allocation to EU Taxonomy-aligned economic activities concerns the 'Transmission and distribution of electricity' - NACE codes: D35.12, D35.13 and complies with the technical screening criteria set out in Section 4.9 ANNEX 1 of Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 (Taxonomy Climate Delegated Act). Activity 4.9 is classified as an enabling activity under the EU Taxonomy, as it facilitates the decarbonisation of other sectors, particularly by supporting the integration of renewable energy sources and the electrification of final energy demand.
For this issuance, Terna expects to allocate 100% of the abovementioned economic activities under the "Renewable Energy" eligible green
project category, as per Terna's Green Bond Framework updated in July 2025.
In this regard, Terna envisages to allocate ca. 51% of the bond proceeds to refinance eligible green projects and the remaining 49% to finance future eligible green projects. The full allocation of bond proceeds is forecasted within the timeframe of the relevant Industrial Plan, currently lasting five years.
The proceeds will not be allocated to activities related to nuclear energy or fossil gas. Intended allocation to economic activities not aligned with the technical screening criteria
The proceeds will not be allocated in accordance with Article 5 of Regulation (EU) 2023/2631 to activities which are not fully EU taxonomy aligned. The proceeds will be allocated in accordance with the EU taxonomy alignment requirements.
Process and timeline for allocation
Terna has put in place a dedicated Green Committee, which is composed of employees holding related roles. The role of the Committee is to review and validate the selection of the Eligible Green Projects. The Committee meeting will take place on an annual basis and as and when the situation requires.
The evaluation and selection process put in place by Terna ensures a full alignment with Technical Screening Criteria defined in the Annex 1 of Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 (Taxonomy Climate Delegated Act) for the activity '4.9 Transmission and distribution of electricity'.
DNSH
The Terna Group has carried out an assessment of climate risks that may have an impact on transmission assets, described in the Climate Change Disclosure, which aims to identify and assess climate risks connected with Terna's plants and activities. Climate assessments underpinning Terna's Resilience Plan, a cross-cutting plan that contains all the initiatives designed to boost the electricity grid's resilience to the severe weather events that are occurring with increasing intensity and frequency.
With regard to the objective of transitioning to a circular economy, the Terna Group continued to monitor the Roadmap of Actions to 2023 relating to the Circular Economy Strategy for the procurement of materials and their proper use, sustainable use of resources including secondary raw materials, and waste management. See the relevant part of the section 'Environmental information'.
With reference to the objective of preventing and reducing pollution, the Terna Group follows the IFC's General Environmental, Health and Safety Guidelines, and the applicable rules and regulations, in order to limit the impact of electromagnetic radiation on human health. Moreover, periodic internal checks of environmental data revealed no traces of polychlorinated biphenyls (PCBs) in transformers used or installed by Group companies in 2024. Finally, when necessary, the Group conducted environmental impact assessments (EIAs) on individual projects related to transmission and dispatching activities. When an EIA was carried out, the necessary mitigation and compensation measures to protect the environment were implemented. In addition, a Strategic Environmental Assessment (SEA) procedure was prepared to corroborate the Group's planning decisions.
For sites/operations located in or near biodiversity-sensitive areas (including the Natura 2000 network of protected areas, UNESCO World Heritage sites and major biodiversity areas, as well as other protected areas), an appropriate environmental risk assessment was conducted, if applicable. When possible, the Group carried out an assessment to implement mitigation, compensation and rehabilitation measures in order to restore the sites affected by works to their original state.
Minimum safeguards
For the purposes of verifying the alignment of Terna Group's activities, an analysis was conducted on the appropriateness of the measures in place at Group level with respect to the principles referred to in Article 18 of the Regulation, namely the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights, including the principles and rights established by the eight fundamental conventions identified in the International Labor Organization's Declaration on Fundamental Principles and Rights at Work and the International Charter of Human Rights. For the purposes of the analysis, the Group also took into account the guidance provided by the Platform on Sustainable Finance (PSF) in its Final Report on Minimum Safeguards published in October 2022 and the European Commission's Recommendation of June 2023 on 'indicators of negative impacts on sustainability'.
In view of the cultural, social and economic diversity of the various countries in which the Terna Group operates, the Parent Company requires individual subsidiaries to adopt and supplement their own Code of Ethics, in addition to their own policy documents, with conduct criteria specific to their activities and operating context. This enables the criteria of conduct for all Group companies to be consistent with the highest standards of environmental protection, safety, human rights and workers' rights.
Oversight of the issues underlying the minimum safeguards is ensured by the presence of prescriptive instruments, such as Group policies, guidelines, and organisational/operational tools, including dedicated structures, procedures, and management and control systems. The Terna Group has sufficient safeguards and controls in place to ensure compliance with Article 18 of the Regulation, thanks to the presence of:
A Code of Ethics, whose principles must be respected in all Group procedures;
Guidelines on respecting human rights in the Terna Group;
A due diligence procedure on respecting human rights, followed by any necessary corrective actions;
Regulations on the qualification of companies, which entails compliance with the principles of the Code of Ethics;
Effective and public communication on human rights issues;
A whistleblowing procedure;
Complaint mechanisms accessible to stakeholders via the Group's website;
Anticorruption guidelines.
Issuance costs
Issuance costs will not be deducted from the bond proceeds.
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Environmental impact of bond proceeds
The information on the environmental impacts of the bond proceeds will be provided in the post-issuance impact report, in accordance with i) Article 12(1) of Regulation (EU) 2023/2631 and Terna Green Bond Framework and verified by an independent external reviewer.
Terna will endeavor to report on an annual basis until bond maturity project impacts and environmental benefits by eligible green project or aggregated by green category.
Terna reported impact data are the result of grid simulations, conducted using models allowing a comparison of the ex-ante operation of the electricity system and the related environmental impacts with and without individual projects. The results of the grid simulations are then used in the cost-benefit analysis applied to the main projects included in the Grid Development Plan. Given that there may be several years between the planning of a project and the start-up of work, the cost-benefit analysis for a project may be repeated to take into account new scenarios
and the environmental impacts may change over time. Where projects are not subject to cost-benefit analysis, the value of the related benefits is measured using an approach in line with this method.
Terna aims to transparently communicate these environmental indicators and ensure the robustness of methodologies and assumptions used. Methodologies and assumptions behind indicators will be detailed in Terna's Integrated Report, which is published annually and subject to external verification.
Given that (i) the projects that the proceeds of a European Green Bond will be allocated to will be defined on a future date upon the issuance of such European Green Bond, and (ii) some of the projects could be still under construction or even inception, it is difficult to forecast production in the coming years, as well as the environmental benefits derived from that production, the information on the environmental impacts of the bond proceeds will be provided in the post-issuance impact report, annually and until the maturity date of the European Green Bond in accordance with i) Article 12(1) of the EuGB Regulation10, ii) Terna's Green Bond Framework iii) best market practices.
Examples of relevant impact metrics could include:
Connections to renewable energy plants (MW);
Increased production from renewable sources (MWh).
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Information on reporting
Link to the issuer's website: https://www.terna.it/en
Link to the issuer's relevant reports: https://www.terna.it/en/general-archive#Sustainability/2024
As set out in Article 11(1) of Regulation (EU) 2023/2631, the date on which the first reporting period starts is the last date of the financial year of issuance. The allocation report will include, to the extent feasible, information on amounts allocated and the expected environmental impacts on a project-by-project level.
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CapEx plan
In accordance with Article 7 of Regulation (EU) 2023/2631, no CapEx plan is needed as Terna will allocate the proceeds only to activities that are already fully aligned with the EU taxonomy at the time of issuance.
- Other relevant information
European Green Bonds issued by Terna are also meeting the voluntary guidance defined in its Green Bond Framework (July 2025), which has obtained a Second Party Opinion (SPO) confirming the alignment with the Green Bond Principles 2025 as administered by ICMA.
Terna has a process in place to ensure traceability of funds. Upon receipt, proceeds will be invested in the treasury investment portfolio until allocation to Eligible Projects.
The Green Bond Framework and the SPO are available here.