Bond Acea 3.75% ( XS0970840095 ) in EUR

Acea

100 % ▼

Italy

XS0970840095 ( in EUR )

3.75% per year ( payment 1 time a year)

12/09/2018 - Bond has expired

Prospectus brochure of the bond Acea XS0970840095 in EUR 3.75%, expired

100 000 EUR

600 000 000 EUR

The Bond issued by Acea ( Italy ) , in EUR, with the ISIN code XS0970840095, pays a coupon of 3.75% per year.
The coupons are paid 1 time per year and the Bond maturity is 12/09/2018

ACEA S.p.A.
(incorporated with limited liability under the laws of the Republic of Italy)
600,000,000
3.750 per cent. Notes due 12 September 2018
The issue price of the 600,000,000 3.750 per cent. Notes due 12 September 2018 (the "Notes") of Acea S.p.A. (the "Issuer") is 99.754 per
cent. of their principal amount.
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their principal amount on 12 September 2018. The
Issuer may, at its option, redeem all, but not some only, of the Notes on 13 March 2015 or any date thereafter at an amount equal to their
principal amount plus (if applicable) a premium, together with any accrued interest, as described under "Terms and Conditions of the Notes
Redemption at the option of the Issuer". Also, the Notes are subject to redemption in whole at their principal amount at the option of the
Issuer at any time in the event of certain changes affecting taxation in the Republic of Italy as described under "Terms and Conditions of the
Notes --Redemption for taxation reasons".
The Notes will bear interest from 12 September 2013 at the rate of 3.750 per cent. per annum payable annually in arrear on 12 September
each year commencing on 12 September 2014. Payments on the Notes will be made in Euros without deduction for or on account of taxes
imposed or levied by the Republic of Italy to the extent described under "Terms and Conditions of the Notes -- Taxation".
An investment in the Notes involves certain risks. For a discussion of these risks, see "Risk Factors" beginning on page 4.
This Prospectus has been approved by the Commission de Surveillance du Secteur Financier (the "CSSF"), in its capacity as competent
authority in Luxembourg, as a prospectus under the Luxembourg Law of 10 July 2005 on Prospectuses for Securities (the "Luxembourg
Prospectus Law"), which implements Directive 2003/71/EC (the "Prospectus Directive" as amended, which includes the amendments
made by Directive 2010/73/EU). Application has been made for the Notes to be listed on the Official List and admitted to trading on the
regulated market of the Luxembourg Stock Exchange, which is a regulated market for the purposes of the Markets in Financial Instruments
Directive 2004/39/EC (as amended).
This Prospectus (together with the documents incorporated by reference herein) is available on the Luxembourg Stock Exchange's website
(www.bourse.lu). The CSSF gives no undertaking as to the economic or financial opportuneness of the transactions contemplated by this
Prospectus or the quality or solvency of the Issuer in line with the provisions of article 7(7) of the Luxembourg Prospectus Law.
The Notes have not been, and will not be, registered under the United States Securities Act of 1933 (the "Securities Act") and are subject to
United States tax law requirements. The Notes are being offered outside the United States by the Joint Lead Managers (as defined herein) in
accordance with Regulation S under the Securities Act ("Regulation S"), and may not be offered, sold or delivered within the United States
or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
The Notes are expected on issue to be assigned a rating of Baa2 by Moody's Investors Service Ltd ("Moody's") and BBB- by Standard &
Poor's Credit Market Services Italy S.r.l. ("Standard & Poor's") and BBB+ by Fitch Italia S.p.A. ("Fitch"). Each of Moody's, Standard &
Poor's and Fitch is established in the EEA and registered under Regulation (EU) No 1060/2009, as amended (the "CRA Regulation"). Each
of Moody's, Standard & Poor's and Fitch appears on the latest update of the list of registered credit rating agencies on the European
Securities and Markets Authority ("ESMA") website at www.esma.europa.eu/page/List-registered-and-certified-CRAs. A security rating is
not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time by the assigning
rating agency.
The Notes will be in bearer form and in the denominations of 100,000 and integral multiples of 1,000 in excess thereof up to and
including 199,000. The Notes will initially be in the form of a temporary global note (the "Temporary Global Note"), which will be
deposited on or around 12 September 2013 (the "Closing Date") with a common safekeeper for Euroclear Bank SA/NV ("Euroclear") and
Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). The Temporary Global Note will be exchangeable, in whole or in
part, for interests in a permanent global note (the "Permanent Global Note") not earlier than 40 days after the Closing Date upon
certification as to non-U.S. beneficial ownership. The Permanent Global Note will be exchangeable in certain limited circumstances in
whole, but not in part, for Notes in definitive form in the denominations of 100,000 and integral multiples of 1,000 in excess thereof up to
and including 199,000. See "Summary of Provisions Relating to the Notes in Global Form".
Joint Lead Managers and Bookrunners

BANCA IMI
BNP PARIBAS
Crédit Agricole CIB
UniCredit Bank
Prospectus dated 10 September 2013

CONTENTS
IMPORTANT NOTICES ............................................................................................................................... 2
RISK FACTORS ............................................................................................................................................ 4
INFORMATION INCORPORATED BY REFERENCE ............................................................................ 19
TERMS AND CONDITIONS OF THE NOTES ......................................................................................... 20
SUMMARY OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM ............................... 34
DESCRIPTION OF THE ISSUER ............................................................................................................... 36
CAPITALISATION OF THE ISSUER ........................................................................................................ 60
SUMMARY FINANCIAL INFORMATION OF THE ISSUER ................................................................. 61
REGULATORY ........................................................................................................................................... 67
TAXATION .................................................................................................................................................. 86
SUBSCRIPTION AND SALE ..................................................................................................................... 92
GENERAL INFORMATION ....................................................................................................................... 94

- 1 -

IMPORTANT NOTICES
This document comprises a prospectus for the purpose of Article 5.3 of the Prospectus Directive.
The Issuer accepts responsibility for the information contained in this Prospectus and declares that, to the best of
its knowledge, having taken all reasonable care to ensure that such is the case, the information contained in this
Prospectus is in accordance with the facts and contains no omission likely to affect its import.
The Issuer has confirmed to Banca IMI S.p.A., BNP Paribas, Crédit Agricole Corporate and Investment Bank
and UniCredit Bank AG (together, the "Joint Lead Managers") that this Prospectus contains all information
regarding the Issuer and the Notes which is (in the context of the issue of the Notes) material; such information
is true and accurate in all material respects and is not misleading in any material respect; any opinions,
predictions or intentions expressed in this Prospectus on the part of the Issuer are honestly held or made and are
not misleading in any material respect; this Prospectus does not omit to state any fact necessary to make such
information contained herein (in such context) not misleading in any material respect; and all reasonable
enquiries have been made to ascertain and to verify the foregoing.
This Prospectus should be read in conjunction with all information which is incorporated by reference in and
forms part of this Prospectus (see "Information Incorporated by Reference").
The Issuer has not authorised the making or provision of any representation or information regarding the Issuer
or the Notes other than as contained in this Prospectus or as approved for such purpose by the Issuer. Any such
representation or information should not be relied upon as having been authorised by the Issuer or the Joint Lead
Managers.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any Note shall in any circumstances
create any implication that the information contained herein concerning the Issuer or the Issuer together with its
consolidated subsidiaries (the "Group" or the "ACEA Group") is correct at any time subsequent to the date
hereof or that any other information supplied in connection with the offering of the Notes is correct as of any
time subsequent to the date indicated in the document containing the same, or that there has been no adverse
change, or any event reasonably likely to involve any adverse change, in the condition (financial or otherwise)
of the Issuer or the Group since the date of this Prospectus.
Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation
by the Issuer or any of the Joint Lead Managers that any recipient of this Prospectus or any other information
supplied in connection with the offering of the Notes should purchase any Notes. Each investor contemplating
purchasing any Notes should make its own independent investigation of the financial condition and affairs, and
its own appraisal of the creditworthiness, of the Issuer or the Group. Neither this Prospectus nor any other
information supplied in connection with the offering of the Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Joint Lead Managers to any person to subscribe for or to purchase any Notes.
The distribution of this Prospectus and the offering, sale and delivery of Notes in certain jurisdictions may be
restricted by law. Persons into whose possession this Prospectus comes are required by the Issuer and the Joint
Lead Managers to inform themselves about and to observe any such restrictions. Neither the Issuer nor the Joint
Lead Managers represent that this Prospectus may be lawfully distributed, or that the Notes may be lawfully
offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or
pursuant to an exemption available thereunder, nor do they assume any responsibility for facilitating any such
distribution or offering. In particular, no action has been taken by the Issuer or the Joint Lead Managers which is
intended to permit a public offering of the Notes or the distribution of this Prospectus in any jurisdiction where
action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and
neither this Prospectus nor any advertisement or other offering material may be distributed or published in any
jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations.
For a description of certain restrictions on offers, sales and deliveries of Notes and on distribution of this
Prospectus and other offering material relating to the Notes, see "Subscription and Sale". In particular, the Notes
have not been and will not be registered under the Securities Act and are subject to United States tax law
requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States
or to, or for the account or benefit of, U.S. persons.

- 2 -

In this Prospectus, unless otherwise specified: references to a "Member State" are references to a Member
State of the European Economic Area; references to "", "EUR" or "Euro" are to the currency introduced at the
start of the third stage of European economic and monetary union, and as defined in Article 2 of Council
Regulation (EC) No. 974/98 of 3 May 1998 on the introduction of the euro, as amended; and references to
"billions" are to thousands of millions.
The language of this Prospectus is English. Certain legislative references and technical terms have been cited in
their original language in order that the correct technical meaning may be ascribed to them under applicable law.
Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures
shown for the same category presented in different tables may vary slightly and figures shown as totals in
certain tables, including percentages, may not be an arithmetic aggregation of the figures which precede them.
STABILISATION
In connection with the issue of the Notes, BNP Paribas (the "Stabilising Manager") (or persons acting on
behalf of the Stabilising Manager) may over allot Notes or effect transactions with a view to supporting
the price of the Notes at a level higher than that which might otherwise prevail. However, there is no
assurance that the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) will
undertake stabilisation action. Any stabilisation action may begin on or after the date on which adequate
public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at any time,
but it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days after the
date of the allotment of the Notes. Any stabilisation action or over-allotment must be conducted by the
Stabilising Manager (or persons acting on behalf of the Stabilising Manager) in accordance with all
applicable laws and rules.

- 3 -

RISK FACTORS
The Issuer believes that the following risk factors may affect its ability to fulfil its obligations under the Notes.
All of these risk factors are contingencies which may or may not occur and the Issuer is not in a position to
express a view on the likelihood of any such contingency occurring. In addition, risk factors which are material
for the purpose of assessing the market risks associated with the Notes are also described below.
The Issuer believes that the risk factors described below represent the principal risks inherent in investing in the
Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the
Notes may occur for other reasons which may not be considered significant risks by the Issuer based on
information currently available to it or which it may not currently be able to anticipate. Prospective investors
should also read the detailed information set out elsewhere in this Prospectus (including, without limitation, any
documents incorporated by reference herein) and reach their own views prior to making any investment
decision, based upon their own judgment and upon advice from such financial, legal and tax advisers as they
have deemed necessary.
Words and expressions defined in "Terms and Conditions of the Notes", or elsewhere in this Prospectus have
the same meaning in this section. Prospective investors should read the entire Prospectus.
FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS UNDER
THE NOTES
Risks relating to the industries in which the Group operates
The evolution in the legislative and regulatory context for the electricity, waste and water sectors poses a risk
to the Group
Changes in applicable legislation and regulation, whether at a national or European level, as well as in the
regulations adopted by specific regulatory agencies, including the Italian Authority for Electric Energy and Gas
(Autorità per l'Energia Elettrica e il Gas "AEEG"), and the manner in which they are interpreted, could
impact the Group's earnings and operations positively or negatively, both through the effect on current
operations and also through the impact on the cost and revenue-earning capabilities of current and future
planned developments in the business. Such changes could include changes in tax rates, changes in
environmental or safety or other workplace laws, or changes in the regulation of cross border transactions.
Public policies related to water, waste, energy, energy efficiency and/or air emissions, may impact the overall
markets in which the Group operates.
The Group operates its business in a political, legal, and social environment which is expected to continue to
have a material impact on the performance of the Group. The regulations of a particular sector may affect many
aspects of the Issuer's and the Group's business and, in many respects, determines the manner in which the
Group conducts its business and the fees it charges or obtains for its products and services. Any new or
substantially altered rules and standards may adversely affect the Group's revenues, profits and general financial
condition and therefore have a consequent adverse impact on the market value of the Notes and/or on the
Issuer's ability to pay interests on the Notes or to repay the Notes in full at their maturity.
The Group is dependent on concessions from local authorities for its regulated activities
For the financial year ended 31 December 2012, the Group's regulated activities (integrated water cycle,
distribution of electricity and electricity sale to protected users) accounted for approximately 81 per cent. of the
Group's EBITDA.
The regulated activities (integrated water cycle, distribution of electricity and public lighting) are dependent on
concessions from local authorities that vary in duration across the Group's business areas.
In the case of expiry of a concession at its stated maturity date as well as in the case of early termination for any
reason (including the failure by a concession holder to fulfil its material obligations under its concession), each
concession holder must continue to operate the concession until it is replaced by the new incoming concession
holder. Each concession is governed by agreements with the relevant grantor requiring the relevant concession
holder to comply with certain obligations (including performing regular maintenance). Each concession holder
is subject to penalties or sanctions for non-performance or default under the relevant concession. Failure by a

- 4 -

concession holder to fulfil its material obligations under a concession could, if such failure is left not remedied,
lead to early termination by the grantor of the concession. Furthermore, in accordance with general principles of
Italian law, a concession can be terminated early for reasons of public interest. In either case, the relevant
concession holder might be required to transfer all of the assets relating to the operation of the concession to the
grantor or to the incoming concession holder. However, in the case of early termination of a concession, the
concession holder might be entitled to receive a compensation amount determined in accordance with the terms
of the relevant concession-agreement.
Legislation in Italy could also affect the expiry date of certain concessions. See "The evolution in the legislative
and regulatory context for the electricity, waste and water sectors poses a risk to the Issuer" above.
No assurances can be given that the Group will enter into new contracts to permit it to engage in the businesses
described above after the related contracts expire, or that any new contract entered into or renewals of existing
contracts will be on terms similar to those of its current contracts. The Group's failure to enter into new contracts
or renew existing contracts, in each case on similar or otherwise favourable terms, could have an adverse impact
on the market value of the Notes and/or on the Issuer's ability to pay interest on the Notes or to repay the Notes
in full at their maturity.
Regulation of local public services and expiry of concessions
Legislation regulating local public services of economic importance was affected by the outcome of the law-
repealing referendum (referendum abrogativo) held in Italy on 12 and 13 June 2011 (the "Referendum").
The Referendum repealed Article 23-bis of Law Decree No. 112 of 25 June 2008 (converted with amendments
into Law No. 133 of 6 August 2008), as amended by Article 15 of Law Decree No. 135 of 25 September 2009,
an emergency legislative measure taken by the Italian government to implement a decision of the European
Court of Justice (converted into Law No. 166 of 20 November 2009) ("Article 23-bis").
Article 23-bis provided that, for companies whose shares were listed on a stock exchange prior to 1 October
2003 (such as the Issuer) and their subsidiaries, any local concessions (as opposed to national concessions)
granted at that date without a tender and with the exception of concessions in the gas distribution sector (to
which Article 23-bis was not applicable) shall expire at the date provided by the relevant contract, upon the
condition that the participation held by public entities in such companies shall be reduced below certain
thresholds by 30 June 2013 and 31 December 2015. Otherwise, the relevant contracts shall be terminated
respectively on 30 June 2013 and 31 December 2015, without the need for a formal decision to be handed down
by the awarding authority.
To fill the legislative gap created by the outcome of the Referendum, a series of regulations contained in Law
Decree No. 138 of 11 August 2011 were enacted - the so-called "Stabilisation Decree" - as converted by Law
No. 148 of 14 September 2011 ("Law 148/2011"), which reaffirmed that, in order to avoid the relevant
concessions granted for waste management, public lighting and public transport services being automatically
terminated respectively on 30 June 2013 and 31 December 2015 without any formal decision by the awarding
authority, the participation held by public entities in companies whose shares were listed on a stock exchange
prior to 1 October 2003 and their subsidiaries should have been reduced to a share not exceeding 40 per cent. by
30 June 2013 and not exceeding 30 per cent. by 31 December 2015. As a consequence of the appeal filed by a
number of regional administrations against these provisions, the measures were affected by Decision No. 199
taken by the Italian Constitutional Court on 17 July 2012 which declared them, in part, constitutionally
unlawful, because they had re-introduced provisions analogous to those provided under Article 23-bis, which
had been previously repealed by the Referendum.
Following such decision, while the legislation regarding the management of local network public services on the
basis of optimal and homogeneous territorial ambits and rewarding mechanisms for the assignment of the
management of the services by public tender remained in force (as per Article 3-bis of Law 148/2011), the
provision relating to the early termination of the concessions that do not comply with Law 148/2011 (as per
Article 4 of Law 148/2011) is no longer applicable.
In this respect, pursuant to Article 34, paragraphs 20-26 of Law Decree No. 179 of 18 October 2012 (the so-
called "Growth Decree 2"), converted by Law No. 121 of 17 December 2012, the concessions granted to
companies whose shares were listed on a stock exchange prior to 1 October 2003 and their subsidiaries will
terminate according to the terms originally set forth in the relevant concession agreements or any ancillary

- 5 -

documents. If the concession agreement does not specify the expiry date of the concession, the concession shall
expire not later than 31 December 2020, without the need for a formal decision to be handed down by the
relevant awarding authority.
Therefore, the laws and regulations in force as at the date hereof (namely, Article 34 of the Growth Decree 2) no
longer provide for the reduction of public participation in those companies managing certain public services in
the concession regime (such as the Issuer and its subsidiaries). On the contrary, such companies will maintain
the relevant concessions (subject to Article 34 of the Growth Decree 2) until (i) the scheduled maturity date set
forth in the relevant concession agreement or (ii) 31 December 2020, if the relevant concession agreement does
not set forth the concession's expiry date.
The expiry of any concessions currently held the Group may adversely affect the Group's business, results of
operations and financial condition, with a consequent adverse impact on the market value of the Notes and the
Issuer's ability to repay the Notes in full at their maturity.
For further details and information on the Referendum and the regulations adopted subsequent thereto by the
Italian legislator, see "Regulatory" below.
The Issuer's ability to achieve its strategic objectives could be impaired if it is unable to maintain or obtain
the required licences, permits, approvals and consents
In order to carry out and expand its business, the Issuer needs to maintain or obtain a variety of licences,
permits, approvals and consents from regulatory, legal, administrative, tax and other authorities and agencies.
The processes for obtaining these licences, permits, approvals and consents are often lengthy, complex,
unpredictable and costly.
If the Issuer is unable to maintain or obtain the relevant permits and approvals, its ability to achieve its strategic
objectives could be impaired, with a consequent adverse impact on the market value of the Notes and/or on the
Issuer's ability to pay interest on the Notes or to repay the Notes in full at their maturity.
The Group is exposed to revisions of tariffs in water and energy sectors
The Group operates, inter alia, in the water and energy sectors and is exposed to a risk of variation in the tariffs
applied to end users.
Article 21 of Law Decree No. 201 of 6 December 2011 (the so-called "Save Italy Decree") ordered the
abolition of the national agency for regulating and supervising water matters, providing that the related
functions and intrinsic financial and instrumental resources should be transferred to the AEEG and the Ministry
for the Environment.
Following this change in legislation, in the water sectors, the tariffs payable by customers (as proposed by the
competent district authorities within each district) must be approved by the AEEG. In this respect, through
Resolution No. 585/2012/R/idr of 28 December 2012, the AEEG launched the temporary tariff method for
determining tariffs for the years 2012 and 2013. The temporary method identifies the methodology to be used at
the national level to determine tariffs for the years 2012 and 2013 and anticipates the general outline of the
definitive method expected to apply beginning in 2014.
In addition, the tariff payable by customers in the energy sector (distribution, transmission and metering) may be
subject to certain variations since the components of the tariff are adjusted by the AEEG with reference to four-
year regulatory periods. In particular, during the third regulatory period for the energy networks market, the
AEEG introduced various new regulations governing tariffs, which continue to give rise to a number of
uncertainties resulting from the AEEG's failure to define some equalisation items. In particular, as at the date of
this Prospectus, there is still a degree of uncertainty regarding the mechanism for determining costs incurred in
the development of electronic metering systems and the marketing of transport services.
Should any such changes and uncertainties result in decreases of the tariffs, it could have an impact on the
business of ACEA, with a consequent adverse impact on the market value of the Notes and/or on the Issuer's
ability to pay interest on the Notes or to repay the Notes in full at their maturity.

- 6 -

The Group is exposed to the risk of increases in the costs of fuel or other raw materials, or disruptions in
their supply; it is also exposed to the risk of decreases in the prices obtained for its electricity and to risks
connected with its hedging strategies
In the ordinary course of business, the Group is exposed to the risk of increases in the costs of fuel or other raw
materials, or disruptions in their supply, It is also exposed to the risk of decreases in the price obtained for its
electricity.
The Group consolidated, within a company wholly-owned by the Issuer, the energy management activities,
including the management and optimisation of its electricity portfolio and management of the risk profile of
companies in the Group.
Nevertheless the Group has not eliminated its exposure to these risks, and significant variations in fuel, raw
material or electricity prices, or any relevant interruption in supplies could have a material adverse impact on the
business prospects, results of operations and financial condition of the Issuer and the Group, with a consequent
adverse impact on the market value of the Notes and/or on the Issuer's ability to pay interest on the Notes or to
repay the Notes in full at their maturity.
The hedging strategies pursued by the Group may create new risks and exposures and the Issuer cannot offer
any assurance that they will function as intended. In addition, hedging contracts for the price of electricity
and/or fuels are available in the market only for limited durations. Any hedging effect will not protect the Issuer
and/or the Group against prolonged price movements.
Natural disasters, service interruptions, systems failures, water shortages or contamination of water supplies
as well as other disruptive events could adversely affect profitability
The Group controls and operates utility networks and maintains the associated assets with the objective of
providing a continuous service. In exceptional circumstances, electricity, gas or water shortages, or the failure of
an asset, an element of a network or supporting plant and equipment, could result in the interruption of service
provision or catastrophic damage resulting in significant loss of life and/or environmental damage and/or
economic and social disruption. Water shortages may be caused by increases in demand, below average rainfall,
or by other environmental factors, such as climate change, which may exacerbate seasonal fluctuations in supply
availability. In the event of a shortage, the Group may incur additional costs in order to provide emergency
reinforcement to supplies.
Water supplies may be subject to interruption or contamination, including contamination from the presence of
naturally occurring compounds and pollution from man-made sources or third parties' actions. The Group could
be held liable for human exposure to hazardous substances in its water supplies or other environmental damages.
The Group could be fined for breaches of statutory obligations, including the obligation to supply drinking water
that is wholesome at the point of supply, or held liable to third parties, or be required to provide an alternative
water supply of equivalent quality, which could increase costs.
Moreover, significant damage or other impediments to the waterworks facilities, including multipurpose dams
and the water supply systems, managed by the Issuer's water subsidiaries as could result from (i) natural
disasters floods and prolonged droughts; (ii) human-errors in operating the waterworks facilities, including
multi-purpose dams and water supply systems; and (iii) industrial strikes.
The Group maintains insurance against some, but not all, of these events but no assurance can be given that its
insurance will be adequate to cover any direct or indirect losses or liabilities it may suffer.
An additional risk arises from adverse publicity that these events may generate and the consequent damage to
the Issuer's and the Group's reputation.
Such events may have an adverse impact on the Group's business, operating results and financial position and
could have a consequent adverse impact on the market value of the Notes and/or on the Issuer's ability to pay
interest on the Notes or to repay the Notes in full at their maturity.

- 7 -

The Issuer is exposed to operational risks through its ownership and management of power stations, waste
management and distribution networks and plants
The main operational risk to which the Issuer is exposed is linked to the ownership and management of power
stations, waste management assets and distribution networks and plants. These plants and networks are exposed
to risks that can cause significant damage to the assets themselves and, in more serious cases, production
capacity may be compromised. These risks include extreme weather phenomena, natural disasters, fire, terrorist
attacks, mechanical breakdown of or damage to equipment or processes, accidents and labour disputes. In
particular, the Group's distribution networks are exposed to malfunctioning and service interruption risks which
are beyond its control and may result in increased costs. The Issuer's insurance coverage may prove insufficient
to fully compensate for such losses.
The Issuer believes that its systems of prevention and protection within each operating area, which act according
to the frequency and gravity of the particular events, its ongoing maintenance plans, the availability of strategic
spare parts and its use of tools for transferring risk to the insurance market enable the Group to mitigate the
economic consequences of potentially adverse events that might be suffered by any of its owned or managed
plants or networks.
However, notwithstanding the foregoing, there can be no guarantee that maintenance and spare part costs will
not rise, that insurance products will continue to be available on reasonable terms or that any one event or series
of events affecting any one or more plants or networks will not have an adverse impact on the market value of
the Notes and/or on the Issuer's ability to pay interest on the Notes or to repay the Notes in full at their maturity.
The Group faces risks relating to the variability of weather
Electricity and natural gas consumption levels change significantly as a result of climate changes. Changes in
the weather can produce significant differences in the clients' demand for energy and gas. Furthermore, adverse
weather conditions can affect the regular delivery of energy due to network damage and the consequential
service disruption. Prolonged drought periods can affect the regular production of water resources and may
result in an increase in energy consumption. Significant changes of such nature could adversely affect the
business prospects, results of operations and financial condition of the Issuer and/or the Group, with a
consequent adverse impact on the market value of the Notes and/or on the Issuer's ability to pay interest on the
Notes or to repay the Notes in full at their maturity.
The Group has exposure to credit risk arising from its commercial activity
Credit risk represents the Group's exposure to potential losses that could be incurred if commercial counterparts
fail to meet their debt obligations.
In order to control such risk, a central Group credit policy regulates the assessment of customers' and other
financial counterparties' credit standing, the monitoring of expected collection flows, the issue of suitable
reminders, the granting of extended credit terms if necessary, the taking of prime bank or insurance guarantees
and the implementation of suitable recovery measures. Standard default interest is charged on late payments.
Notwithstanding the foregoing, a single default by a major counterparty, and/or an increase in current default
rates by counterparties generally, could have an adverse impact on the market value of the Notes and/or on the
Issuer's ability to pay interest on the Notes or to repay the Notes in full at their maturity.
The Group's operations are subject to extensive environmental laws, rules and regulations which regulate,
among other things, air emissions, water discharges and the management of hazardous and solid waste
Compliance with environmental laws, rules and regulations requires the Group to incur significant costs relating
to environmental monitoring, installation of pollution control equipment, emission fees, maintenance and
upgrading of facilities, remediation and permitting. The costs of compliance with existing environmental legal
requirements or those not yet adopted may increase in the future. Any increase in such costs, unless promptly
recovered, could have an adverse impact on the Group's business and results of operations, financial position
and cash flows, with a consequent adverse impact on the market value of the Notes and/or on the Issuer's ability
to pay interest on the Notes or to repay the Notes in full at their maturity.

- 8 -

The Group may incur significant environmental expenses and liabilities
Risks of environmental and health and safety accidents and liabilities are inherent in many of the Group's
operations. Notwithstanding the Issuer's belief that the operational policies and standards adopted and
implemented throughout the Group to ensure the safety of its operations are of a high standard, it is always
possible that incidents such as blow-outs, spillover, contaminations and similar events could occur that would
result in damage to the environment, workers and/or local communities.
The Group has accrued risk provisions aimed at coping with existing environmental expenses and liabilities.
Notwithstanding this, it is possible that in the future the Group may incur significant environmental expenses
and liabilities in addition to the amounts already accrued owing to: (i) unknown contamination; (ii) the results of
on-going surveys or surveys that will be carried out in future on the environmental status of certain of the
Group's industrial sites as required by the applicable regulations on contaminated sites; and (iii) the possibility
that disputes might be brought against the Group in relation to such matters.
Any such increase in costs could have an adverse impact on the Group's business and results of operations,
financial position and cash flows, with a consequent adverse impact on the market value of the Notes and/or on
the Issuer's ability to pay interest on the Notes or to repay the Notes in full at their maturity.
The Group faces increasing competition in the energy market
The energy markets in which the Issuer and the Group operate are subject to increasing competition in Italy. In
particular, the Group encounters competition in its electricity business, in which it competes with other
producers and traders from both Italy and outside of Italy who sell electricity in the Italian market to industrial,
commercial and residential clients.
An increase in competition could have an impact on the prices paid or achieved in the Issuer's electricity
production and trading activities, which in turn could have an adverse impact on the Group's business and
results of operations, financial position and cash flows, with a consequent adverse impact on the market value of
the Notes and/or on the Issuer's ability to pay interest on the Notes or to repay the Notes in full at their maturity.
Further risks relating to the Issuer and/or the Group
The Group's business may be adversely affected by the current disruption in the global credit markets and
associated impacts
Since the second half of 2007, disruption in the global credit markets, coupled with the re-pricing of credit risk,
has created increasingly difficult conditions in the financial markets. Financial markets are subject to periods of
historic volatility which may impact the Issuer's ability to fund its business in a similar manner, and at a similar
cost, to the funding raised in the past. Challenging market conditions have resulted in greater volatility and also
in reduced liquidity, widening of credit spreads and lack of price transparency in credit markets. In Europe,
despite measures taken by several governments, international and supranational organisations and monetary
authorities to provide financial assistance to Eurozone countries in economic difficulty and to mitigate the
possibility of default by certain European countries on their sovereign debt obligations, concerns persist
regarding the debt and/or deficit burden of certain Eurozone countries, including Italy, and their ability to meet
future financial obligations, given the diverse economic and political circumstances in individual member states
of the Eurozone. It remains difficult to predict the effect of these measures on the economy and on the financial
system, how long the crisis will exist and to what extent the Issuer's business, results of operations and financial
condition may be adversely affected.
Changes in investment markets, including changes in interest rates, exchange rates and returns from equity,
property and other investments, may affect the financial performance of the Group. Furthermore, the Issuer's
ability to access the capital and financial markets and to refinance debt to meet the financial requirements of the
Issuer and the Group may be adversely impacted and the Group's costs of financing may significantly increase.
In addition, the financial performance of the Group could be adversely affected by a worsening of general
economic conditions in the markets in which it operates. Any such effect on the Group's financial performance
could have a consequent adverse impact on the market value of the Notes and/or on the Issuer's ability to pay
interest on the Notes or to repay the Notes in full at their maturity.

- 9 -