abrdn invests in Italian gas network

1 July 2022

abrdn has invested EUR 60m on behalf of its strategic partner Phoenix Group (“Phoenix”) in Societa Gasdotti Italia S.p.A (“SGI” or the “Company”) the second largest Italian Transmission System Operator with 1,700km of high-pressure gas network.

The loan is used to refinance existing debt, extend the debt maturity profile and support new investment including the replacement of existing infrastructure, extension of the pipeline, and construction of a new compressor station. SGI benefits from an established and supportive regulatory framework in Italy with limited volume risk ensuring a sustainable stream of cash flows to our clients.

Gas infrastructure plays a key role in the energy transition in Europe, and part of the proceeds of the refinancing will be used to upgrade the network in preparation for transportation of hydrogen. SGI achieved a 5-star rating from GRESB in the most recent assessment round, demonstrating strong operational ESG performance against peers. Throughout the life of the loan the Company will provide annual reporting on a number of ESG KPIs including Scope 1/2/3 carbon emissions, board gender diversity and health and safety incident rates.

Albane Poulin, Head of European Private Placements at abrdn said: “We are delighted to support Ontario Teachers’ Pension Plan and Swiss Life in the refinancing of SGI. This investment allows us to support SGI’s capex plan to upgrade the existing networks in order to improve energy efficiency, ensure security of supply in Italy as well as preparation for energy transition. SGI benefits from an established and supportive regulatory framework in Italy with limited volume risk, which can provide a sustainable stream of cash flow to our clients.

“SGI will play a key role in the decarbonation of gas through transportation of hydrogen and biomethane in their pipeline. We are particularly excited to execute our first private credit transaction in Italy, underpinning a key strategic priority for abrdn to grow our core capabilities in real assets”

Manuel Dusina, Head of Infrastructure, Phoenix Group added: “Core defensive regulated assets like this in jurisdictions outside of the UK are a key element of our approach to diversification when building our portfolio. Investing in line with our sustainability agenda is also important to us, and this investment improves energy efficiency and upgrades in SGI’s network, and will play a vital role in the energy transition within Italy and Europe.”

Source: abrdn