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Rome Energy Meeting 2008 Rome, 13-14 November 2008

Rome Energy Meeting 2008 Rome, 13-14 November 2008. Investments Opportunities and Project Finance in the Energy Market Luigi Marsullo President Finpublic ltd – FinEnergie ltd Italian Founder, D.G. EVALUATION Ministry of Economy and Finance. The Italian framework.

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Rome Energy Meeting 2008 Rome, 13-14 November 2008

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  1. Rome Energy Meeting 2008Rome, 13-14 November 2008 Investments Opportunities and Project Finance in the Energy Market Luigi Marsullo President Finpublic ltd – FinEnergie ltd Italian Founder, D.G. EVALUATION Ministry of Economy and Finance

  2. The Italian framework • Italy is dependent on external sources • Average energy prices in Italy are higher than in the rest of Europe • Energy policy is presently driven by market liberalisation, devolution to the regions and diversification • Complex administrative procedures are required to conduct investments

  3. Recent issues in the Italian energy policy • Diversification of energy sources and increase of efficiency • Secure timely investment in energy-related infrastructure • Clarify the responsibilities of the regions and the central Government

  4. Energy market trends • Improve integration of the Italian energy market into the single European market • Promote the process of liberalisation of the electricity and gas markets • Prepare the tools to promote and facilitate investments • Increase transparency of markets rules and streamline procedures

  5. The Italian infrastructures financing background • The Public sector has traditionally played a major role in infrastructures projects in Italy • The public expenditure reduction has given rise to a significant impact on investments • Social role of the infrastructures: this is the starting point for a new framework • A new co-operation between public sector and private investors is needed

  6. Key Issues to be addressed Ex-ante evaluation Ex-post evaluation Performance monitoring in the long term

  7. Why PPP in Italy ? • Key features of successful partnerships • Major gaps identification • Role of a strategic planning process • New roles and responsabilities of Regions in two crucial sectors: energy and transport • Conflict of Interests between Central Government and Local Government • What are the solutions and prospects for the near future?

  8. PPP Preliminary Criteria in Italy • Stakeholders involvement • Risk assessment (political, financial, operating, environmental) • Legal and regulatory framework • Identifying constraints and how to overcome them • Defining objectives

  9. Key issues faced by Central and Local Governments in Italy • Performance requirements • Definition of key performance indicators • Quality improvement • Definition of inputs and outputs • Need for overall control and monitoring in Italy

  10. Impact Assessment • Identifying stackholders and related interests • Assessing the impact of the project • Identifying assumptions and risks about stakeholders • Main problems: too many authorities and burocracy

  11. PPP investment financing • Business evaluation • Feasibility evaluation • PPP must be financially viable • Cost-benefit analysis: a significant tool for identifying the best options that conform to the economic goal of the country to satisfy the demand of the final users

  12. Performance monitoring (1) • Monitoring is an effective tool to manage the Public-Private dialogue process and to demonstrate its purpose and performance of the investments in infrastructures • Monitoring through cost-benefit analysis is an optimum instrument to ascertain the financial feasibility of the project financing

  13. Performance monitoring (2) • Performance evaluation and reporting • Definition and characterisation of performance indicators

  14. Performance indicators • They should provide information for decision-makers • The information must be available in time to influence decisions • They should be truly representative • They should be adequately verifiable

  15. The challenge: definition of public/private roles • Sectors that are fully liberalised and other sectors affected by rules of public governance • Electricity and gas grids operated under concessions by central or local government

  16. The opportunities • The Italian energy market may present significant opportunities to new investments • Financial and business environment look friendly towards renewed and strengthened enterprise collaboration and partnership • PPP should develop a baseline assessment to measure their effectiveness in order to enable the partnership to better measure how it is achieving its goals over time and delivering on its envisaged benefits

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