Introduction

On 26 September, Fabrizio Palermo was appointed by the Board of Directors as the new Chief Executive Officer of Acea. Once he took office, Management prepared an action plan which strengthened the Groups results.

In the water sector, in November, Acea released the “doubling” project for Peschiera, one of ten works of national interest. The infrastructure has been operating without interruption for over 80 years and represents an essential structure for providing water services in the City of Rome. The creation of a parallel aqueduct means improving the security of the capital city’s water supply and is a priority for Acea. Consequently, it has prepared a project, with an estimated cost of € 1.2 billion, of which € 700 million is covered by public resources allocated in the 2023 Stability Law.

Additionally, assignment of NRRP projects was opened up, mainly with reference to water, for around € 733 million total, in the areas of Lazio, Tuscany, Campania and Umbria, with a number of the tenders necessary for their execution, already begun in December. In particular, these projects call for actions to improve the efficiency of distribution networks, reduce the problem of dispersion, including digitising and monitoring networks, as well as modernising and creating new innovative treatment systems for processing wastewater sludge.

In the environmental area, in October, Acea received authorisation from the Lazio Region, initially requested on 20 August 2020, to improve the Waste to Energy Plant in San Vittore (prov. Frosinone). The project is fundamental in closing the waste cycle in Lazio and will improve waste-to-energy capacity by 186,000 tons per year, with an investment of over € 230 million.

In the same area, Acea has significantly increased its commitment to waste management in the City of Rome through direct treatment in its plants and logistics management relative to third-party plants, also located outside of Italy.

Acea has also further strengthened its position in central Italy, specifically:

• in Umbria, by creating a regional multiutility model through the aggregation of ASM Terni, a company which, among other things, offers waste selection, transport and collection services in the ITA 4 Umbria area;
• in Abruzzo, the Group completed the acquisition of Deco, a company which constructs and manages waste treatment plants. The scope of the business acquired in Abruzzo also includes a mechanical biological treatment plant, a photovoltaic plant, a biogas plant and two disposal plants;
• in Le Marche, Acea acquired Italmacero, a company offering mechanical treatment and recovery of separate urban and special non-hazardous waste, with a plant offering 13,000 tonnes of capacity;
• in the Province of Rome, Acea acquired a majority stake in Tecnoservizi, company offering mechanical treatment and recovery of separate urban and special non-hazardous waste, with a plant offering 210,000 tonnes of capacity.

On 1 March, Acea and a group of major domestic and international leaders in their respective sectors presented an indication of interest to participate in the tender for the assignment of the new Santa Palomba Waste to Energy Plant (prov. Rome).

With regard to public lighting and the electricity distribution grid, Acea was able to begin significant investments, also with an eye to the upcoming Jubilee, thanks to the renewed collaboration with the Municipality of Rome. In October, Acea completed a new high-voltage electrical line, south west of Rome, which strengthened the existing grid and will offer an estimated reduction in CO2 production of almost 600,000 kg per year. Additionally, in late January, the Company launched an innovative metre in Rome which supports the balance between energy demand and supply.

The Group paid greater attention to managing costs and investments, establishing a timely revision of its procurement procedures to improve its competitive processes, allowing for a prompt reduction in costs and optimisation of investments and work orders. Additionally, lines of action were defined to contain credit risk, in part through prevention and managing the customer portfolio. These actions made it possible to contain costs while improving operating efficiency and recovering margins, with an overall benefit in the fourth quarter of around € 40 million, mitigating the extraordinary effects recognised in the same period, such as the increase in the extraordinary solidarity contribution pursuant to Article 37 of Decree Law 21/2022 (“extra-profit contribution”) of around € 13 million, the increase in interest rates on financial management of around € 8 million and the increase in the impairment of receivables which with respect to the inertial scenario increased by around € 12 million.

Finally, in January 2023, Acea successfully returned to the equity market, completing the issue of two Green Bonds, for a total of € 700 million, at a rate of 3.875%, maturing in January 2031, further strengthening Acea’s position as a sustainability leader.