Terna Mulls Options Including Stake Sale in €25 Billion Grid
(Bloomberg) -- Terna SpA is evaluating options including the sale of a minority stake in Italy’s electricity grid, to pay for new projects and reduce debt, people familiar with the matter said.
The state-controlled company is studying ways to fund an aggressive investment plan aimed at renewing and strengthening its Italian network, said the people, who asked not to be named discussing private conversations. The process could lead to teaming up with a financial partner, the people said.
Terna estimates the value of its regulated assets will reach €24.8 billion ($27.8 billion) by the end of this year as Chief Executive Officer Giuseppina Di Foggia pursues her investment program. The process of studying options is at an early stage, the people said. While the company is working with advisers, the plan is fluid, they added, cautioning that a transaction may not happen in the end.
Shares of Terna reversed earlier losses to rise as much as 0.6% in Milan following Bloomberg’s report. The stock has advanced 18% this year.
The company constantly analyzes financial instruments that can be used to develop the grid, and reflects those decisions in its industrial plan, a representative said. Terna declined to comment on any specific plans for a stake sale, saying it wouldn’t discuss “rumors or speculation.”
Power grids across Europe are in need of vast investments to ease severe bottlenecks as a surge in renewable-energy installations strains aging infrastructure. Dutch state-backed Tennet Holding BV struck a multibillion-euro deal with a consortium led by Norges Bank Investment Management last month to divest a stake in its German network.
Italian Prime Minister Giorgia Meloni’s government nominated Di Foggia in 2023, who has embarked on Terna’s biggest-ever investment plan to keep up with booming demand for electrical capacity and network security. The company intends to spend more than €23 billion over 10 years to construct land-based high-voltage lines and underwater links.
Terna’s planned investments are projected to raise the value of its regulated assets to €32 billion by 2028, representing compound annual growth of 9% from 2024-2028.
While it’s accelerating capital spending, Terna has said it’s committed to preserving its capital structure. Net debt rose about 7% from the end of 2024 to €11.9 billion as of June 30.
Developments in the works at Terna include the Tyrrhenian Link, a subsea project connecting the Italian peninsula with Sardinia and Sicily; an undersea power line between Italy and Tunisia; the strengthening of an existing line between Sardinia, Corsica and Tuscany; and the doubling of Italy’s high-voltage connection with Greece.
(Updates with stock movement in fourth paragraph)
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