Inside Infrastructure: Your insights into Italy

Following our look at the global state of play in the CCUS sector last week, this week we bring a you a regional insight, focusing on Italy's infrastructure and energy sectors. Driven largely by the National Recovery and Resilience Plan and complementary state initiatives, these sectors are entering a phase of transformative expansion. This momentum opens the door for renewed interest by investors, both domestic and international, seeking exposure to long-term, innovation-driven growth.

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Italy is deploying a significant volume of public investment through the €194.4 bn National Recovery and Resilience Plan (PNRR), the Italian component of the EU’s NextGenerationEU programme. Approximately €108 bn is earmarked for projects in infrastructure, energy transition, digitalisation and green mobility – many of which are now entering implementation or procurement phases. These interventions are matched by additional national and EU co-financing mechanisms, bringing the total capital potentially in motion above €235 bn by 2026.

Since 2023 the allocation of PNRR investments has been substantially modified, especially for the pursuit of the objectives described in the new Mission 7 “REPowerEU,” whose goal is to rapidly reduce the EU’s dependence on gas, oil, and coal imports. The funds allocated to the Mission amount to €11.4 bn and more recently specific resources have been allocated to promote the circular economy of waste and to encourage the purchase of low environmental impact cars, for a value of approximately €1.2 bn.

The Italian strategy aims to accelerate the country’s green transition, modernise transport and digital infrastructure, and enhance industrial competitiveness. Alongside the PNRR, Italy is also planning longer-term structural investment plans (beyond 2026) to maintain momentum and bridge financing gaps, especially in energy generation, hydrogen, and smart grids.

1.  A transformative public investment program: Italy’s PNRR represents one of the largest national allocations within the EU framework and serves as a cornerstone of Italy’s economic transformation. Out of the total €194.4 bn, more than €59 bn is dedicated to the green revolution and ecological transition, while over €25 bn is allocated to sustainable mobility and €40 bn to digitalisation and innovation – many of which intersect with infrastructure and energy objectives.

Among the most relevant areas:

• Transport infrastructure modernisation: Over €25 bn in public investment is being channelled to strengthen rail corridors (with emphasis on high-speed rail in the South), upgrade regional rail services, and support intramodality in ports and logistics hubs.
• Smart grids and renewables: Approximately €23.8 bn is reserved for accelerating the decarbonisation of the energy sector, with direct funding for upgrading grid infrastructure, promoting distributed renewable (especially solar and offshore wind), and supporting green hydrogen pilots. The PNRR aims to boost the national RES capacity with a target of 70 GW of renewables by 2030.
• Energy efficiency and building renovation: Around €15.3 bn is invested in energy efficiency upgrades, including the “Superbonus” program and sustainable public building renovations.

2.  Energy transition acceleration: The Italian government is prioritising energy independence and system flexibility through a diversified strategy, including: expanding renewable capacity (with a focus on solar and wind), streamlining permitting procedures, promoting green hydrogen for industrial and transport uses in hard-to-abate sectors and investing in battery storage systems. The 2023 reform of the permitting regime and the establishment of a national energy infrastructure coordination body aim to speed up project implementation. Further legislative proposals are expected in 2025 to simplify environmental and grid connection approvals.

3.  Private sector involvement and co-investment opportunities: A significant share of PNRR-funded projects is structured to encourage private co-investment through PPPs, joint ventures, and public guarantees. For instance, the InvestEU program, combined with national funds, is expected to mobilise over €45 bn in private investment by 2026. New energy projects (e.g. hydrogen valleys and renewable hubs) are eligible for blended financing schemes, combining state aid with EU-backed loans and equity. Opportunities are especially attractive in energy transmission and storage, digital infrastructure, EV charging networks, and energy retrofitting of buildings.

Latest energy and infrastructure deals and opportunities

• Renewables M&A: The renewable energy sector is witnessing robust M&A activity. For instance, Eni and Ares Management lately entered into an agreement setting forth the acquisition by the latter of a 20% stake in Eni Plenitude, Eni-controlled operating company which carries out energy and gas supply and renewable energy development, against around €2 bn. More recently, KKR Infrastructure-backed Encavis has agreed to acquire a 207 MW solar portfolio in Italy from Portugal’s EDP Renováveis (EDPR) valued around €250 M, while Fondi Italiani per le Infrastrutture (F2i) has launched the sale of a 38% minority stake in its diversified energy giant Sorgenia and solar business EF Solare, with a deal value of around 1 bn. Moreover, Independent power producer (IPP) Sonnedix has acquired an 80MW solar PV plant in Sicily, Italy from renewables developer Blunova, the acquisition being part of a larger portfolio acquisition that will increase the IPP’s Italian assets by 250MW.
• Grid modernisation projects: Italy's efforts to meet its National Integrated Energy and Climate Plan (PNIEC) targets for 2030 – aiming for 65% renewable electricity – are accelerating investment opportunities in grid digitalisation, HVDC transmission, and battery storage (BESS). In 2025, national grid operator Terna has launched major initiatives for grid expansion in Southern Italy and on cross-border interconnections. Of particular note, Macquarie Asset Management and CPP Investments increased their exposure to the sector by acquiring a 10% stake in Terna's battery storage platform, valued at over €700 million, marking one of the year’s key energy infrastructure transactions. These moves align with recent capacity auctions for 2 GW of renewable energy and storage launched by Italy's energy agency (GSE) and underline strong near-term interest in Italy’s grid modernisation push.
• Transport sector investments: Italy's €110 bn investment plan for rail and sustainable transport by 2032, outlined in the updated “Piano Nazionale per le Infrastrutture”, is already attracting strong M&A interest in EV infrastructure, rail logistics, and urban mobility. Throughout 2025, Ferrovie dello Stato (FS) has advanced plans to spin off its high-speed rail network (RFI) into a separate entity while retaining state control: the CEO suggests a minority stake sale, potentially to Italian and international private investors – though full state majority is to be maintained. The mobility-as-a-service (MaaS) segment also saw movement, with Iveco Group entering a joint venture with Chinese manufacturer Foton to co-develop electric commercial vehicles for the Italian and EU markets. In the airline sector, Lufthansa Group purchased a 41 % stake in Italy’s flag carrier ITA Airways, with options for increasing ownership by a further 49 % through 2029, and the remaining 10 % after 2029, effectively laying the groundwork for full integration. These deals highlight the country's shift towards sustainable mobility and digitalisation of transport networks.

Legal and regulatory developments

• Consolidated Law on Renewable Energy Sources (FER): Since it came into force in December 2024, the Consolidated Law on FER regulates and accelerates the energy transition in Italy, as well as simplifies the bureaucratic procedures for the installation and the interconnected management of FER plants. This measure is based on three administrative regimes: the free activity, the simplified authorization procedure (PAS), and the single authorization (AU), each of them applicable according to the type and size of the plant. In addition, for some types of works, tacit consent is provided for further accelerating the authorization process. Furthermore, Regions must adapt their local regulations to align with these new provisions, promoting a uniform and simplified approach throughout the country as a whole.
• Infrastructure Decree 2025: The recent public interest in operational and infrastructural profiles, linked to environmental impact assessments and FER projects prospects, leads the conversion of the Infrastructure Decree 2025 n.73 into law. This provision sets forth implementation measures capable of meeting the PNRR objectives. New funds have been introduced for the renewal of the vehicle fleets of road transport companies, with specific focus on environmental sustainability. With regard to public procurement, new exemptions have been provided for force majeure or emergency situations. In addition, a facilitated system for access to logistics and renewable energy sectors financing has been provided for, with technical changes that innovate the regulatory framework and adapt it to the new objectives related to the ecological and energy transition.
• Reform of the Procurement Code: Following the most recent update in 2023, the Public Procurement Code underwent changes that have brought to light the strong interest in promoting Green Public Procurement (GPP), characterized essentially by the least environmental impact solution selection criterion. In the same year, the National Action Plan for Sustainable Consumption in Public Administration was formulated and it endorses the achievement of Goal 12 of the United Nations 2030 Agenda through GPP. Due to the strong influence of the Infrastructure Decree 2025 enforceability, various updates to the Procurement Code have been planned, focusing on the introduction of reward measures for those who present solutions with reduced environmental impact, using recycled materials, but also the requirement to comply with the Minimum Environmental Criteria.
• Next Annual Competition Law: With regard to PNRR related interested sectors, the current bill of the Annual Competition Law focuses on reforms such as the competition increase at the local level for the development of electric mobility. The introduction of the obligation for municipalities to structure competitive procedures to increase the number of operators also safeguards the proper management of charging infrastructure, a key segment for the proper functioning of the market. Since 2022, the legislator itself has undertaken to regulate the subsequent Competition Annual Laws for protecting and promoting competition, with a particular focus on energy, transport, waste, communications, and retail trade.

And finally…. Real Asset or Fake News?

Well done to those of you who knew that hyperloop pods, whilst capable of serious speed, are not quite breaking the sound barrier yet. As we wave farewell to the summer sun this week's spotlight is on solar power innovation…. but can you spot the one claim that doesn’t quite shine?

High in the sky: The International Space Station’s solar arrays generate enough electricity to power 40 average homes on Earth.

Walking on sunshine: The largest bank of floating solar panels in the world is located in China, on the site of a former coal mine now reservoir.

Doubling up: Houses with solar panels on the roof also benefit from reduced heating costs as the solar panels heat up the roof space.

Window on the world: Transparent solar panels now exist that can turn skyscraper windows into hidden power generators.

Looking down, lighting up:  A solar farm in India is so vast it can be seen from space.

If you think you know which of these facts is fiction please let us know. We will publish the answer in next week's post.