By: Alessandro Pecorari, Policy & Public Affairs Manager
This article follows up from the inaugural session of “The Italian Momentum – Insights for Global Investors,” held at the Italian Embassy in London, in partnership with Clifford Chance and the Italian Trade Agency.
In November 2025, at the Italian Embassy in London, speakers made the case for opportunity in Italian infrastructure – arguing that commonly held hesitations for investment were falling away. In our latest session, we and our members solidified that: updating guests on what’s changed in the Italian market, what constraints remain, and where the conversation is heading.
A market with the data to back the narrative
The May edition of our biannual Pulse Survey, which tracks institutional investor sentiment towards leading infrastructure markets, recorded Italy’s highest ever investor confidence score – capping a steady climb that began in 2023. This increased sentiment is matched by mounting activity: our investor members alone recorded $47.5 billion in transactions in Italy in 2025.
Regulatory shifts
Speakers, including our members, singled out three reforms as having moved the dial since our last session at the Italian Embassy:
1. The Decreto Bollette passed parliamentary conversion and transitioned to law. Its most consequential change is structural: grid connection has shifted from a reservation-based queue to a merit-based allocation system, with priority following project readiness and economic merit rather than order of application.
2. The FER Consolidated Law is reducing authorisation risk for many renewable assets through a faster, clearer permitting architecture. This addresses what has historically been one of the largest discount factors applied to Italian renewable project valuations.
3. The MIMIT strategy together with Law Decree No. 21 has created, for the first time, a single authorisation procedure with binding timelines and a clear land-use framework for data centre development. Italy’s data centre market has more than tripled in size since 2024. Announced investment for 2026–2028 already exceeds €25 billion.
Panellists flagged one clear caveat – power costs. Electricity prices in Italy remain persistently above the European average, with gas prices coming down gradually given the geopolitical backdrop.
Energy security as an industrial transition
The discussion reframed the energy transition as something broader than an environmental shift; speakers argued that Italy, and Europe more broadly, are moving away from a system constrained by fossil fuel supply and towards one built around manufacturing and technology-based renewable assets – inherently less exposed to commodity price volatility.
This shift introduces its own new demands. The intermittency of renewable generation creates a structural need for assets that can restore grid balance, particularly battery storage and biomethane plants. This was framed not as a niche requirement but as a new asset class growing directly out of the transition itself.
Speakers also pointed to a widening of the underlying investment mandate, which has developed from decarbonisation alone to a broader push for European energy independence. This distinction matters for how investors should think about policy durability and demand visibility.
While local regulatory complexity hasn’t disappeared from the investment landscape, targeted state-backed frameworks are beginning to stabilise the climate. This is expeced to support a longer duration, patient capital approach to deployment rather than opportunistic or short-cycle positioning.
Digital infrastructure: from connectivity to a grid-constrained asset class
Fibre networks and data centres have matured from emerging asset categories into essential utilities. Event speakers discussed upgrading legacy copper and aging fibre infrastructure into full Fiber to the Home (FTTH) platforms as a future-proofing exercise. Such upgrades offer scalability and meaningfully lower energy consumption per unit of capacity, while supporting digital sovereignty objectives alongside commercial returns.
The question remains of where the real constraint on growth now sits. With cloud migration and AI-driven workloads, data centre demand is accelerating. However, panellists were clear that the binding constraint has shifted away from market demand, which is abundant, and towards energy grid availability and permitting timelines.
That shift is also reshaping geography. Hyperscalers are increasingly looking past the traditional Tier I hubs of London, Dublin, Paris, and Frankfurt. For investors, this points directly to the opening up of opportunities in markets such as Milan.
Financing the harder technologies: waste, sustainable aviation fuel, and the shape of capital structures
Participant discussions also turned towards technologies more difficult to finance – specifically waste-to-energy platforms and sustainable aviation fuel (SAF). Both prospects carry meaningful cost premiums over fossil-fuel baselines, and their commercial viability remains dependent on state-led directives that vary across jurisdictions.
Panellists pointed to a growing toolkit of market-enabling mechanisms designed to bridge that gap: contracts for difference, centralised procurement models, and localised industrial networks incentivise early adoption ahead of full commercial maturity.
These dynamics are also reshaping how assets are financed. Project financing structures are evolving toward more flexible debt arrangements that balance lender risk against clearer exit pathways. Similarly, traditional commercial bank lending is increasingly being supplemented by alternative credit markets and institutional capital. Investors expect capital stacks to continue diversifying as European regulatory frameworks for these technologies mature.
Final reflections
This session reinforced a clear message: the more attractive, risk-adjusted opportunity in Italy’s current cycle lies less in legacy assets and more in identifying and solving structural bottlenecks. Grid balancing, permitting, power availability, or financing structures for harder technologies continue to delay deployment of new energy and digital infrastructure.
Italy’s policy architecture has moved meaningfully in the past six months to remove some of those bottlenecks. Our event highlighted power costs and permitting timelines as the most promising prospects.