Project Free Conad – Energy Efficiency in Project Finance

Sector: Energy Efficiency for Large Retail

Sponsorship: Arpinge (58%) – Conad del Tirreno (40%) – Officinae Verdi (2%) Financing bank: Unicredit Target: Stores affiliated to Conad del Tirreno

Arpinge operates in the energy efficiency business since the end of 2014, when, in partnership with Conad del Tirreno and Officinae Verdi, with the financial support of Unicredit, invested as controlling shareholder in the “Free Conad” project –the first and probably still the largest energy-efficiency plan involving a retail purchasing group developed under a project financing scheme.

The project envisaged the renovation, over a period of 18 months, in terms of structural upgrade and energy saving measures, of around 20 Conad del Tirreno supermarkets in Tuscany, Latium (Lazio) and Sardinia Regions, for a total investment of up to €27 million (VAT excluded), 80% of which financed by Unicredit. In terms of environmental impact, the project aimed to decrease energy consumption by 35% and reduce CO2 footprint by 100 tons per year per retail store. Collateral positive effects were also expected as new employment opportunities for local economies.

Eighteen months later, fully on schedule, and after €25 million of investment (excluding VAT), the project fully met the expectations, also in terms of energy consumption reduction. Positive economic returns were generated for Conad del Tirreno too, which has been seeing an increase in customer satisfaction and on sales, in contrast to the negative trend of the local market. In 2016, the project generated revenues of €4.4 million with a net profit of more than €0.5 million.

The Free Conad project is achieving the target returns expected by Arpinge, which are higher than those generally offered by current financial markets, and exposed to technical and operational risks mitigated by project financing contractual provisions.

Arpinge’s mission is to act as an interface between finance and real economy, by focusing on projects with solid industrial value and prospects, in the strong convincement that the benefits to the real economy and the employment produced by the investment offer the best way of protecting the retirement savings that have been entrusted to our management. The Free Conad project is an investment of evident industrial impact, reshaping a retail network to increase its competitiveness, and supporting with its building yards – spread over three Italian regions – technical professionals, in terms of both employment opportunities offered and best practice established.

Operation Scheme

Efficienza Energetica conad eng