FUNDING worth €3.4bn has been made available to modernise and upgrade the 178km Fiumetorto -Bicocca section of the Palermo - Catania line in Sicily, including €2.1bn from the European Investment Bank (EIB).

The funding agreement was presented on March 14 at the Italian Ministry of Infrastructure and Transport by Italian deputy prime minister, Mr Matteo Salvini, European Investment Bank (EIB) vice-president, Ms Gelsomina Vigliotti, European Commission acting deputy director general for mobility and transport, Mr Herald Ruijters, CEO of Italian State Railways (FS), Mr Luigi Ferraris, Cassa Depositi e Prestiti (CDP) CEO, Mr Dario Scannapieco, and chief of Imi Corporate & Investment Banking Division at Intesa, Mr Sanpaolo Mauro Micillo.

The financial operation is the first of its kind in Italy in the infrastructure sector, and combines direct financing to the government with support for credit institutions. The new round of financing complements €1.4bn provided under the Italian Recovery and Resilience Facility (RRF) to support investment in the Palermo - Catania line.

Specifically the agreement provides €800m in direct financing from the EIB to the Ministry of Economy and Finance (MEF), of which the first €200m tranche has already been executed.

It also includes a €1.3bn counter-guarantee, also provided by the EIB and developed in conjunction with FS, in favour of financial intermediaries. €500m has been allocated to Intesa Sanpaolo, the bank that pioneered the project by helping to outline the instrument, and €300m has been earmarked to CDP. The remaining €500m will be allocated to other financial intermediaries at a later stage.

This instrument is an operational first for the EIB and is intended to counter guarantee the contractual guarantees issued by financial institutions in favour of infrastructure manager RFI relating to eligible and successful contractors. The 50% counter-guarantee will generate guarantees amounting to two-times the EIB commitment, resulting in a total of €2.6bn in guarantees, bringing the total sum available to €3.4bn.

The counter-guarantee is backed by InvestEU, the European Union (EU) programme that aims to mobilise €372bn of investment by 2027, of which the EIB Group is the main implementing partner.

The resources will contribute to the modernisation and upgrading of 178km of the Palermo - Catania line, part of the Scandinavia-Mediterranean Corridor of the TEN-T network, connecting the northern and eastern coastal urban areas of Sicily with the region’s interior.

The upgrade will allow freight and passenger trains to travel at up 200km/h, helping to reduce journey times from three hours to two. The project will contribute to the region's economic and social development and promote sustainable mobility.