Sustainable finance
Fully in line with Terna’s strategy, which aims to combine investment and sustainability to drive growth and value creation, it is Terna’s ambition to play a leading role in the sustainable finance market. This strategy was also followed in 2025.
As at 31 December 2025, the senior green bonds issued by Terna under the two Euro Medium Term Notes (EMTN) programmes amounted to €3.75 billion, in addition to the three perpetual, subordinated hybrid green issues, respectively issued in February 2022 and April 2024 on a standalone basis, for a total amount of €1.85 billion, and in January 2026 under Terna’s EMTN Programme listed on the MOT, for a total nominal amount of €850 million. The latter issue is the first perpetual, subordinated hybrid European Green Bond issued by Terna.
With regard to green bond debt, on 10 February 2025 Terna launched a new single-tranche green bond issue, again as part of the EMTN programme. The issue has a total nominal value of €750 million, a term of 7 years and matures on 17 February 2032. The bond was issued at a price of 99.975%, with a spread of 90 basis points above the midswap rate and has an annual coupon interest of 3.125%. On 15 July 2025, Terna launched the first European Green Bond, single tranche, as part of the €4,000,000,000 EMTN Programme, listed on the electronic bond market (MOT) managed by Borsa Italiana and approved by the Commissione Nazionale per le Società e la Borsa (CONSOB) in June 2025, for a total nominal amount of €750 million, a 6-year duration with a maturity date of 22 July 2031. The bond was issued at a price of 99.589%, with a spread of 70 basis points above the midswap rate and has an annual coupon interest of 3.00%.
Green bond issues are used to finance or refinance Eligible Green Projects. These are projects producing environmental benefits that meet the criteria listed in the Green Bond Framework, updated by Terna in July 2025, and drafted in compliance with the Green Bond Principles updated by ICMA (International Capital Market Association) in June 2025, the requirements introduced by the new EU Regulation 2023/2631 (EU Green Bond Standard), and the European Union Taxonomy. In July 2025, Terna’s Green Bond Framework was assessed by S&P Global Ratings, acting as a Second Party Opinion provider, which assigned it an overall “Dark Green” rating, the highest level on S&P’s “Shades of Green” scale. In addition, in January 2026, Moody’s Ratings assigned the Green Bond Framework an overall “SQS1 Sustainability Quality Score (Excellent)”, the highest possible level under Moody’s methodology.
Specifically, the net proceeds from the issues are used to finance:
• projects that aim to increase renewable energy production – for example, infrastructure enabling renewable energy plants to be connected to the national grid or that allow for a larger volume of renewable energy to be injected into the grid;
• projects designed to cut CO2 emissions by reducing grid losses – for example, infrastructure designed to boost the efficiency of the electricity transmission grid;
• projects designed to ensure the quality, security and resilience of grid infrastructure.
As of 31 December 2025, Terna can also rely on several ESG-linked Term Loans for a total of €2.5 billion, three ESG-linked Revolving Credit Facilities linked to sustainability indicators for a total of about €4.3 billion and a Euro Commercial Paper (ECP) programme of €2 billion for the issuance of short-term conventional or ESG notes.
In particular, with regard to the ESG-linked Revolving Credit Facility, it should be noted that, on 21 March 2025, an amendment and restatement agreement was signed to refinance and increase to €1.8 billion the amount of a Revolving Credit Facility entered into in December 2021, originally amounting to €1.65 billion.
As regards the ESG-linked Term Loans, on 20 November 2025 an ESG-linked Credit Facility Agreement was signed with BPER Banca for a total amount of €200 million and a five-year term; in addition, on 18 December 2025 a further ESG-linked Credit Facility Agreement was signed with UniCredit for a total amount of €300 million and a maximum term of five years.
In line with Terna’s commitment to sustainability and social and environmental responsibility, the Share buyback programme to service the 2025-2029 Performance Share Plan was concluded in September, with a total outlay of about €9 million and the purchase of 1,060,499 treasury shares (representing about 0.053% of the share capital). The Programme provides a mechanism linked to the achievement of specific ESG targets by the Company.
Terna’s leadership in sustainable finance is widely recognised in the market which, since 2018, has shown a strong appetite for the green bonds issued. In addition to its inclusion in the main ESG indices, from January 2021, Terna is the first Italian electric utility to join the Nasdaq Sustainable Bond Network, the sustainable finance platform operated by Nasdaq that brings together investors, issuers, investment banks and specialist organisations.
Terna continues to be a member of the CFO Coalition for the SDGs, which is building on the work of the CFO Task Force for the SDGs, the initiative launched by the UN Global Compact at the end of 2019 to develop sustainable finance and of which Terna was one of the founding members. The Coalition aims to continue to promote sustainability, scale up its global community and follow the example set by the CFOs that founded the Taskforce.
Further confirmation of the commitment to playing an active role in developing sustainable finance, Terna is taking part in the Corporate Forum for Sustainable Finance, a network of major European businesses committed to the development of sustainable finance as a means to promote a more sustainable and responsible society.
Terna, both individually and as a member of the above Corporate Forum on Sustainable Finance, will continuously monitor developments in European legislation, with particular regard to the impact on sustainable finance.
Finally, on 26 January 2026, Terna launched a perpetual, subordinated, hybrid, non-convertible, fixed-rate European Green Bond, placed with institutional investors, for a total nominal amount of €850 million. The bond is non-callable for 6 years and was issued at 100%, with a spread of 123 basis points over the Mid-Swap rate, implying a subordination premium of less than 60 basis points over a senior issue of equivalent maturity. It will pay a fixed annual coupon of 3.875%, corresponding to the effective rate of the transaction, up to, but excluding, the first reset date of 2 February 2032. From that date, if the bond has not been redeemed early, the hybrid instrument will bear annual interest at the five-year Euro Midswap rate plus an initial margin of 123 basis points, increased by an additional 25 basis points from 2 February 2037 and by a further 75 basis points from 2 February 2052.
As at 31 December 2025, the senior green bonds issued by Terna under the two Euro Medium Term Notes (EMTN) programmes amounted to €3.75 billion, in addition to the three perpetual, subordinated hybrid green issues, respectively issued in February 2022 and April 2024 on a standalone basis, for a total amount of €1.85 billion, and in January 2026 under Terna’s EMTN Programme listed on the MOT, for a total nominal amount of €850 million. The latter issue is the first perpetual, subordinated hybrid European Green Bond issued by Terna.
With regard to green bond debt, on 10 February 2025 Terna launched a new single-tranche green bond issue, again as part of the EMTN programme. The issue has a total nominal value of €750 million, a term of 7 years and matures on 17 February 2032. The bond was issued at a price of 99.975%, with a spread of 90 basis points above the midswap rate and has an annual coupon interest of 3.125%. On 15 July 2025, Terna launched the first European Green Bond, single tranche, as part of the €4,000,000,000 EMTN Programme, listed on the electronic bond market (MOT) managed by Borsa Italiana and approved by the Commissione Nazionale per le Società e la Borsa (CONSOB) in June 2025, for a total nominal amount of €750 million, a 6-year duration with a maturity date of 22 July 2031. The bond was issued at a price of 99.589%, with a spread of 70 basis points above the midswap rate and has an annual coupon interest of 3.00%.
Green bond issues are used to finance or refinance Eligible Green Projects. These are projects producing environmental benefits that meet the criteria listed in the Green Bond Framework, updated by Terna in July 2025, and drafted in compliance with the Green Bond Principles updated by ICMA (International Capital Market Association) in June 2025, the requirements introduced by the new EU Regulation 2023/2631 (EU Green Bond Standard), and the European Union Taxonomy. In July 2025, Terna’s Green Bond Framework was assessed by S&P Global Ratings, acting as a Second Party Opinion provider, which assigned it an overall “Dark Green” rating, the highest level on S&P’s “Shades of Green” scale. In addition, in January 2026, Moody’s Ratings assigned the Green Bond Framework an overall “SQS1 Sustainability Quality Score (Excellent)”, the highest possible level under Moody’s methodology.
Specifically, the net proceeds from the issues are used to finance:
• projects that aim to increase renewable energy production – for example, infrastructure enabling renewable energy plants to be connected to the national grid or that allow for a larger volume of renewable energy to be injected into the grid;
• projects designed to cut CO2 emissions by reducing grid losses – for example, infrastructure designed to boost the efficiency of the electricity transmission grid;
• projects designed to ensure the quality, security and resilience of grid infrastructure.
As of 31 December 2025, Terna can also rely on several ESG-linked Term Loans for a total of €2.5 billion, three ESG-linked Revolving Credit Facilities linked to sustainability indicators for a total of about €4.3 billion and a Euro Commercial Paper (ECP) programme of €2 billion for the issuance of short-term conventional or ESG notes.
In particular, with regard to the ESG-linked Revolving Credit Facility, it should be noted that, on 21 March 2025, an amendment and restatement agreement was signed to refinance and increase to €1.8 billion the amount of a Revolving Credit Facility entered into in December 2021, originally amounting to €1.65 billion.
As regards the ESG-linked Term Loans, on 20 November 2025 an ESG-linked Credit Facility Agreement was signed with BPER Banca for a total amount of €200 million and a five-year term; in addition, on 18 December 2025 a further ESG-linked Credit Facility Agreement was signed with UniCredit for a total amount of €300 million and a maximum term of five years.
In line with Terna’s commitment to sustainability and social and environmental responsibility, the Share buyback programme to service the 2025-2029 Performance Share Plan was concluded in September, with a total outlay of about €9 million and the purchase of 1,060,499 treasury shares (representing about 0.053% of the share capital). The Programme provides a mechanism linked to the achievement of specific ESG targets by the Company.
Terna’s leadership in sustainable finance is widely recognised in the market which, since 2018, has shown a strong appetite for the green bonds issued. In addition to its inclusion in the main ESG indices, from January 2021, Terna is the first Italian electric utility to join the Nasdaq Sustainable Bond Network, the sustainable finance platform operated by Nasdaq that brings together investors, issuers, investment banks and specialist organisations.
Terna continues to be a member of the CFO Coalition for the SDGs, which is building on the work of the CFO Task Force for the SDGs, the initiative launched by the UN Global Compact at the end of 2019 to develop sustainable finance and of which Terna was one of the founding members. The Coalition aims to continue to promote sustainability, scale up its global community and follow the example set by the CFOs that founded the Taskforce.
Further confirmation of the commitment to playing an active role in developing sustainable finance, Terna is taking part in the Corporate Forum for Sustainable Finance, a network of major European businesses committed to the development of sustainable finance as a means to promote a more sustainable and responsible society.
Terna, both individually and as a member of the above Corporate Forum on Sustainable Finance, will continuously monitor developments in European legislation, with particular regard to the impact on sustainable finance.
Finally, on 26 January 2026, Terna launched a perpetual, subordinated, hybrid, non-convertible, fixed-rate European Green Bond, placed with institutional investors, for a total nominal amount of €850 million. The bond is non-callable for 6 years and was issued at 100%, with a spread of 123 basis points over the Mid-Swap rate, implying a subordination premium of less than 60 basis points over a senior issue of equivalent maturity. It will pay a fixed annual coupon of 3.875%, corresponding to the effective rate of the transaction, up to, but excluding, the first reset date of 2 February 2032. From that date, if the bond has not been redeemed early, the hybrid instrument will bear annual interest at the five-year Euro Midswap rate plus an initial margin of 123 basis points, increased by an additional 25 basis points from 2 February 2037 and by a further 75 basis points from 2 February 2052.
