Bond Italgas Energia 1.625% ( XS1551917591 ) in EUR

Issuer Italgas Energia
Market price 100 %  ▲ 
Country  Italy
ISIN code  XS1551917591 ( in EUR )
Interest rate 1.625% per year ( payment 1 time a year)
Maturity 19/01/2027 - Bond has expired



Prospectus brochure of the bond Italgas S.P.A XS1551917591 in EUR 1.625%, expired


Minimal amount /
Total amount /
Detailed description Italgas S.p.A. is a leading Italian natural gas distribution company managing a network spanning across Italy, primarily focused on infrastructure ownership, operation, and maintenance.

The Bond issued by Italgas Energia ( Italy ) , in EUR, with the ISIN code XS1551917591, pays a coupon of 1.625% per year.
The coupons are paid 1 time per year and the Bond maturity is 19/01/2027










BASE PROSPECTUS


Italgas S.p.A.
(incorporated with limited liability in the Republic of Italy)
2,800,000,000
Euro Medium Term Note Programme
Under this 2,800,000,000 Euro Medium Term Note Programme (the Programme), Italgas S.p.A.
(the Issuer, Italgas or the Company) may from time to time issue notes (the Notes) denominated in any
currency agreed between the Issuer and the relevant Dealer (as defined below).
The maximum aggregate nominal amount of all Notes from time to time outstanding under the Programme
will not exceed 2,800,000,000 (or its equivalent in other currencies calculated as described in the
Programme Agreement described herein), subject to increase as described herein.
The Notes may be issued on a continuing basis to one or more of the Dealers specified under "Overview of
the Programme" and any additional Dealer appointed under the Programme from time to time by the Issuer
(each a Dealer and together the Dealers), which appointment may be for a specific issue or on an ongoing
basis. References in this Base Prospectus to the relevant Dealer shall, in the case of an issue of Notes being
(or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Notes.
An investment in Notes issued under the Programme involves certain risks. For a discussion of these
risks see "Risk Factors".
Application has been made to the Commission de Surveillance du Secteur Financier (the CSSF) in its
capacity as competent authority under the Luxembourg Act dated 10 July 2005 on prospectuses for securities
(the Prospectus Act 2005) to approve this document as a base prospectus. The CSSF assumes no
responsibility for the economic and financial soundness of the transactions contemplated by this Base
Prospectus or the quality or solvency of the Issuer in accordance with Article 7(7) of the Prospectus Act
2005. Application has also been made to the Luxembourg Stock Exchange for Notes issued under the
Programme to be admitted to trading on the Luxembourg Stock Exchange's regulated market and to be listed
on the Official List of the Luxembourg Stock Exchange.
References in this Base Prospectus to Notes being listed (and all related references) shall mean that such
Notes have been admitted to trading on the Luxembourg Stock Exchange's regulated market and have been
admitted to the Official List of the Luxembourg Stock Exchange. The Luxembourg Stock Exchange's
regulated market is a regulated market for the purposes of the Markets in Financial Instruments Directive
(Directive 2004/39/EC).
The requirement to publish a prospectus under the Prospectus Directive only applies to Notes which are to be
admitted to trading on a regulated market in the European Economic Area (the EEA) and/or offered to the
1







public in the EEA other than in circumstances where an exemption is available under Article 3.2 of the
Prospectus Directive (as implemented in the relevant Member State(s)).
Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue
price of Notes and certain other information which is applicable to each Tranche (as defined under "Terms
and Conditions of the Notes") of Notes will be set out in a final terms document (the Final Terms) which,
with respect to Notes to be listed, will be filed with the CSSF. Copies of Final Terms in relation to Notes to
be listed on the Official List of the Luxembourg Stock Exchange will also be published on the website of the
Luxembourg Stock Exchange (www.bourse.lu).
The Programme provides that Notes may be listed or admitted to trading, as the case may be, on such other
or further stock exchanges or markets as may be agreed between the Issuer and the relevant Dealer. The
Issuer may also issue unlisted Notes and/or Notes not admitted to trading on any market.
The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the
Securities Act) or any U.S. State securities laws and may not be offered or sold in the United States or to, or
for the account or the benefit of, U.S. persons as defined in Regulation S under the Securities Act unless an
exemption from the registration requirements of the Securities Act is available and in accordance with all
applicable securities laws of any state of the United States and any other jurisdiction.
The Issuer may agree with any Dealer that Notes may be issued in a form not contemplated by the Terms and
Conditions of the Notes herein, in which event a supplement to the Base Prospectus, a new Base Prospectus
or a drawdown prospectus, in the case of listed Notes only, if appropriate, will be made available which will
describe the effect of the agreement reached in relation to such Notes.
The rating of certain Series of Notes to be issued under the Programme may be specified in the applicable
Final Terms. Whether or not each credit rating applied for in relation to relevant Series of Notes will be
issued by a credit rating agency established in the European Union and registered under Regulation (EC) No.
1060/2009 (as amended) (the CRA Regulation), and included in the list of credit rating agencies published
by the European Securities and Markets Authority on its website (at http://www.esma.europa.eu/page/List-
registered-and-certified-CRAs) in accordance with the CRA Regulation, will be disclosed in the Final Terms.
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. Please also refer to "Risks related to the
market generally" in the "Risk Factors" section of this Base Prospectus.
Arrangers
BNP PARIBAS
UniCredit Bank
Dealers
Banca IMI
Barclays
BNP PARIBAS
Citigroup
Crédit Agricole CIB
J.P. Morgan
ING
Mediobanca
Société Générale Corporate & Investment Banking
UniCredit Bank
The date of this Base Prospectus is 18 November 2016.

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IMPORTANT INFORMATION
This Base Prospectus comprises a base prospectus in respect of all Notes issued under the Programme
for the purposes of Article 5.4 of the Prospectus Directive. Prospectus Directive means
Directive 2003/71/EC (as amended, including by Directive 2010/73/EU), and includes any relevant
implementing measure in a relevant Member State of the European Economic Area.
The Issuer accepts responsibility for the information contained in this Base Prospectus and the Final
Terms for each Tranche of Notes issued under the Programme. To the best of the knowledge of the
Issuer (having taken all reasonable care to ensure that such is the case) the information contained in
this Base Prospectus is in accordance with the facts and does not omit anything likely to affect the
import of such information.
Copies of Final Terms will be available from the registered office of the Issuer and the specified office
set out below of each of the Paying Agents (as defined below).
This Base Prospectus is to be read in conjunction with all documents which are deemed to be
incorporated herein by reference (see "Documents Incorporated by Reference"). This Base Prospectus
shall be read and construed on the basis that such documents are incorporated by reference and form
part of this Base Prospectus.
The Dealers have not independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability
is accepted by the Dealers as to the accuracy or completeness of the information contained or
incorporated by reference in this Base Prospectus or any other information provided by the Issuer in
connection with the Programme. No Dealer accepts any liability in relation to the information
contained or incorporated by reference in this Base Prospectus or any other information provided by
the Issuer in connection with the Programme.
This Base Prospectus contains industry and customer-related data as well as calculations taken from
industry reports, market research reports, publicly available information and commercial
publications. It is hereby confirmed that (a) to the extent that information reproduced herein derives
from a third party, such information has been accurately reproduced and (b) insofar as the Issuer is
aware and is able to ascertain from information derived from a third party, no facts have been omitted
which would render the information reproduced inaccurate or misleading.
No person is or has been authorised by the Issuer or any Dealer to give any information or to make
any representation not contained in or not consistent with this Base Prospectus or any other
information supplied in connection with the Programme or the Notes and, if given or made, such
information or representation must not be relied upon as having been authorised by the Issuer or any
of the Dealers.
Neither this Base Prospectus nor any other information supplied in connection with the Programme or
any Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be
considered as a recommendation by the Issuer or any of the Dealers that any recipient of this Base
Prospectus or any other information supplied in connection with the Programme or any 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. Neither this Base Prospectus nor any other information supplied in
connection with the Programme or the issue of any Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Dealers to any person to subscribe for or to purchase any Notes.
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Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any
circumstances imply that the information contained herein concerning the Issuer is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the
Programme is correct as of any time subsequent to the date indicated in the document containing the
same. The Dealers expressly do not undertake to review the financial condition or affairs of the Issuer
during the life of the Programme or to advise any investor in Notes issued under the Programme of
any information coming to their attention.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended, (the Securities Act) and are subject to U.S. 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 (see "Subscription and Sale").
This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes
in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The distribution of this Base Prospectus and the offer or sale of Notes may be restricted
by law in certain jurisdictions. The Issuer and the Dealers do not represent that this Base Prospectus
may be lawfully distributed, or that any 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, or assume any responsibility for facilitating any such distribution or offering. In
particular, no action has been taken by the Issuer or the Dealers which is intended to permit a public
offering of any Notes or distribution of this Base 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 Base 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. Persons into whose possession this Base Prospectus or any Notes may come must
inform themselves about, and observe, any such restrictions on the distribution of this Base Prospectus
and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base
Prospectus and the offer or sale of Notes in the United States, the European Economic Area (including
the United Kingdom, the Republic of Italy (Italy) and France) and Japan, see "Subscription and Sale".
This Base Prospectus has been prepared on the basis that any offer of Notes in any Member State of
the European Economic Area (each an EU Member State) which has implemented the Prospectus
Directive (each, a Relevant Member State) will be made pursuant to an exemption under the Prospectus
Directive, as implemented in that Relevant Member State, from the requirement to publish a
prospectus for offers of Notes. Accordingly any person making or intending to make an offer in that
Relevant Member State of Notes which are the subject of an offering contemplated in this Base
Prospectus as completed by Final Terms in relation to the offer of those Notes may only do so in
circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus
pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of
the Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor any Dealer have
authorised, nor do they authorise, the making of any offer of Notes in circumstances in which an
obligation arises for the Issuer or any Dealer to publish or supplement a prospectus for such offer.
All references in this document to Euro and refer to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the Treaty on the functioning of the
European Union, as amended and all references to U.S. dollars, U.S.$ and $ refer to United States
dollars.
Any websites referred to in this Base Prospectus are for information purposes only and do not form
part of the Base Prospectus.
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SUITABILITY OF INVESTMENT
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must
determine the suitability of that investment in light of its own circumstances. In particular, each
potential investor may wish to consider, either on its own or with the help of its financial and other
professional advisers, whether it:
(i)
has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and risks of investing in the Notes and the information contained or incorporated by
reference in this Base Prospectus or any applicable supplement;
(ii)
has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact the Notes will have on
its overall investment portfolio;
(iii)
has sufficient financial resources and liquidity to bear all of the risks of an investment in the
Notes, including Notes with principal or interest payable in one or more currencies, or where
the currency for principal or interest payments is different from the potential investor's
currency;
(iv)
understands thoroughly the terms of the Notes and is familiar with the behaviour of any
relevant indices and financial markets; and
(v)
is able to evaluate possible scenarios for economic, interest rate and other factors that may
affect its investment and its ability to bear the applicable risks.
Legal investment considerations may restrict certain investments. The investment activities of certain
investors are subject to investment laws and regulations, or review or regulation by certain
authorities. Each potential investor should consult its legal advisers to determine whether and to what
extent (1) Notes are legal investments for it, (2) Notes can be used as collateral for various types of
borrowing and (3) other restrictions apply to its purchase or pledge of any Notes. Financial
institutions should consult their legal advisers or the appropriate regulators to determine the
appropriate treatment of Notes under any applicable risk-based capital or similar rules.
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TABLE OF CONTENTS

Page
Risk Factors ........................................................................................................................................................ 7
Documents Incorporated by Reference ............................................................................................................ 34
Overview of the Programme ............................................................................................................................ 36
Form of the Notes ............................................................................................................................................. 41
Applicable Final Terms .................................................................................................................................... 44
Terms and Conditions of the Notes .................................................................................................................. 60
Use of Proceeds ................................................................................................................................................ 98
Description of the Issuer ................................................................................................................................... 99
Glossary of Terms and Legislation Relating to the Issuer .............................................................................. 140
Regulatory and Legislative Framework ......................................................................................................... 143
Taxation .......................................................................................................................................................... 153
Subscription and Sale ..................................................................................................................................... 164
General Information ....................................................................................................................................... 168
Annex 1 - Further Information Related To Inflation Linked Notes ............................................................... 171


In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the
Stabilising Manager(s) (or persons acting on behalf of any Stabilisation Manager(s)) in the applicable
Final Terms may over-allot Notes or effect transactions with a view to supporting the market price of
the Notes at a level higher than that which might otherwise prevail. However, stabilisation may not
necessarily occur. Any stabilisation action may begin on or after the date on which adequate public
disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease
at any time, but it must end no later than the earlier of 30 days after the issue date of the relevant
Tranche of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any
stabilisation action or over-allotment must be conducted by the relevant Stabilisation Manager(s) (or
persons acting on behalf of any Stabilisation Manager(s)) in accordance with all applicable laws and
rules.
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RISK FACTORS
In purchasing Notes, investors assume the risk that the Issuer may become insolvent or otherwise be unable
to make all payments due in respect of the Notes. There is a wide range of factors which individually or
together could result in the Issuer becoming unable to make all payments due in respect of the Notes. It is
not possible to identify all such factors or to determine which factors are most likely to occur, as the Issuer
may not be aware of all relevant factors and certain factors which it currently deems not to be material may
become material as a result of the occurrence of events outside the Issuer's control. The Issuer has identified
in this Base Prospectus a number of factors which could materially adversely affect its business and ability
to make payments due under the Notes. Most of these 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, factors which are material for the purpose of assessing the market risks associated with Notes
issued under the Programme are also described below.
Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus
and reach their own views prior to making any investment decision.
FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS
UNDER NOTES ISSUED UNDER THE PROGRAMME
Risks associated with the concentration of the activities of the Italgas Group in Italy
Italgas is active, either directly or through its subsidiaries and unconsolidated investee companies, in natural
gas distribution in Italy. The future results of Italgas will therefore reflect the economic performance of these
activities.
The Italgas Group1 activities will be influenced by the uncertainty linked to the renewal of gas distribution
concessions following the Local Tender Processes2, as well as by the quantification of the reimbursements
provided for the outgoing operator pursuant to the applicable regulations. Unfavourable developments in
these areas could have significant negative effects on the operations, results, balance sheet and cash flow of
the Italgas Group.
Risks associated with the potential competitiveness in the sector in which Italgas operates
The Italgas Group, via Italgas Reti S.p.A. (formerly Italgas S.p.A., Italgas Reti) and its direct or indirect
subsidiaries, is the leader in the natural gas distribution segment in Italy, with a market share of 30% (or
approximately 34% including investee companies) in 2015, in terms of the percentage of end-customers
connected to the network (RP). As at the date of this Base Prospectus, the natural gas distribution market is
fragmented. However, in recent years, it has undergone a process of restructuring and consolidation3. It is
believed that, in the future, with the implementation of the Local Tender Processes for the allocation of the

1 Italgas Group means, collectively, Italgas (previously called ITG Holding S.p.A.) and the companies directly or indirectly
controlled by it, pursuant to Article 2359 of the Civil Code and Article 93 of Legislative Decree No. 58 of 24 February 1998, as later
amended and supplemented (the TUF).

2 Local Tender Process means the sole tender process for the provision of gas distribution services held in each of the 177 minimum
geographical areas (ATEM) identified pursuant to Articles 1 and 2 of the Decree of the Ministry of Economic Development of 19
January 2011.

3 As the AEEGSI's figures confirm (see the 2015 Annual Report of 21 June 2016, Table 3.10, the number of operators decreased
from 251 in 2009 to 227 in 2014 (there were more than 700 in 2000), in view of the Local Tender Processes. The number of
operators is also expected to decrease substantially after these Local Tender Processes (Italgas estimates that the number could drop
below 100).
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natural gas distribution service, this market consolidation process will continue, presenting the opportunity to
exploit economies of scale and operational synergies.
If Italgas were unable to respond adequately to the activities carried out by its competitors, there could be
negative effects on the Italgas Group's operations, results, balance sheet and cash flow.
Market and competition risks. Risks associated with the expiration and renewal of gas distribution
concessions
Gas distribution activities, where the Italgas Group is active are carried out pursuant to concessions issued
by individual municipalities. As of 31 December 2015, the above-mentioned concessions, which are held by
Italgas Reti and its subsidiaries (Napoletanagas S.p.A. (Napoletanagas), AES Torino S.p.A. (AES Torino)4
and ACAM Gas S.p.A. (ACAM Gas), come to a total of 1,472, of which 1,183 have expired. The average
remaining life of the concessions still in force is equal to seven years. During financial year 2015, 74% (i.e.,
756 million) of Italgas Reti's income for carrying services was tied to expired concessions; during the first
half of 2016, this percentage was equal to 73%. In the Italgas Strategic Plan, the Italgas Group assumes that
the expired concessions are re-assigned to the winner of the tenders provided for by the applicable legislation
during the period 2016-2020. Therefore, the above-mentioned percentage represents the maximum risk of
potential loss of revenue as at the date of this Base Prospectus, and, consequently, of the margins of the
Italgas Group in the event that ­ after participation in the tenders ­ it does not obtain the re-assignment of
some of the expired concessions, it being understood that, in such a case, the Reimbursement Value (as
defined in "Glossary of Terms and Legislation Relating to the Issuer" below) would be paid. Given the lack
of information on the margins for each concession, the Issuer assumes a proportional correlation between
loss of revenues and EBITDA losses.
For the sake of completeness, it should be noted that the issue relating to the expiration of concessions
concerns not only the Italgas Group, but all operators active in the gas distribution sector in Italy. In this
regard, from the moment the gas distribution service is qualified as a public service, the companies of the
Italgas Group ­ also following the expiry of the concession ­ continue and should continue with the
management of the service (and be remunerated), limited to the ordinary administration, until the start date
of the new concession (Article 14 of Legislative Decree No. 164 of 2000).
From 2011, I Ministerial Decree No. 226 of 12 November 2011 sets out that the gas distribution service can
only be conducted on the basis of tender processes announced exclusively for ATEMs (as defined in the
"Glossary of Terms and Legislation relating to the Issuer" below), predominantly of a provincial size. For
this purpose, the Italian territory has been sub-divided into 177 ATEMs .
Each ATEM is made up of a combination of Municipalities served by distribution plants that must be
managed by a single concession holder, a beneficiary of the service identified following the tender. The
average size of ATEMs identified is around 110,000 users and stretches from a minimum of around 20,000
to a maximum of around 1,300,000 users. The maximum duration of the commitment is 12 years.
Regarding the tender implementation times, based on the ministerial timetable referred to in Law 11/2015,
the launch was expected for July 2015 with a concentration of tenders in the years 2015, 2016 and 2017. The
timetable of the Ministry of Economic Development was updated on further occasions, most recently by the
"Milleproroghe" decree, converted into law in February 2016. This decree reviewed the tender publication
dates, leaving the overall time limits virtually unchanged and, therefore, focusing them on the years 2016 and
2017. It also (i) postponed the times for the publication of notices (to July 2016 for the first group of
ATEMs); (ii) granted an additional six months for replacement by the regions, while allowing for
replacement by the Ministry of Economic Development if the regions did not perform; and (iii) eliminated
the economic penalty for non-performing bodies.

4
AES Torino was merged by incorporation into Italgas Reti with effect from 1 January 2016.

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This new restructuring therefore provides for the publication of 74 invitations to tender in 2016, 98 in 2017
and 5 in total for years 2018 and 2019.
At the date of this Base Prospectus, 16 invitations were published for a total of 17 ATEMs (Cremona 2 and
Cremona 3 were grouped together), of which one was withdrawn and six were suspended. For a further
seven invitations to tender the bid submission dates were postponed, or rather the pre-qualification request.
Furthermore, it is known that some of the invitations already published were subject to appeal by different
operators, which challenged that the above-mentioned invitations were not in full compliance with the
aforementioned legislation.
The criteria used to evaluate tender offers for natural gas distribution service concessions are governed by
Ministerial Decree No. 226 of 12 November 2011. The criteria for granting concessions provides for the
following: 28 points for the monetary offer (taking into account the rate discount, the services offered to the
clients and the fees to be paid to the relevant municipality); 27 points for the management offer (taking into
account the quality and safety of the service offered), and 45 points for the technical offer (taking into
account the offeror's assessment of the status of the networks and the offeror's ability to implement and
improve the investment plan of the contracting entity in connection with the extension, maintenance and
technical innovations).
At the date of this Base Prospectus, it is not yet possible to express a certain evaluation concerning each
element of the new concession allocation system, and there is no consolidated interpretation of the new
regulatory framework from the granting authorities or from administrative case law.
Under the tender processes launched, the Italgas Group may not be awarded concessions in the planned
areas, or may be awarded said concessions under conditions that are less favourable than the current
conditions, with a possible negative impact on its operations, results, balance sheet and cash flow. It should,
however, be pointed out that, if the concessions relating to previously managed municipalities are not
awarded, the companies of the Italgas Group will have the right to be paid the Reimbursement Value in
favour of the outgoing operator, calculated in accordance with Ministerial Decree No. 226 of 12 November
2011. It is possible that the Reimbursement Value of the concessions resulting from the Tenders, where a
third party is an assignee, is below the value of the RAB. Such a case could have significant negative effects
on the assets and on the balance sheet, income statement and financial position of the Italgas Group.
Under the tender processes launched, Italgas Reti and its subsidiaries may be awarded ATEM concessions
previously managed entirely or partly by other operators; therefore it is not possible to rule out that these
awards could, at least initially, involve greater running costs and capital expenditure for Italgas Reti and its
subsidiaries compared with their operating standards.
Given the complexity of the regulations governing the expiration of the concessions held by the Italgas
Group, this could give rise to judicial and/or arbitral disputes between concession-holders, including Italgas
Reti and its subsidiaries, and third parties, with possible negative effects on the operations, results, balance
sheet and cash flow of the Italgas Group.
Market and competition risks. Risks associated with the reimbursement provided to the outgoing operator
With regard to gas distribution concessions, Article 14, paragraph 8 of Legislative Decree No. 164 of 2000
establishes that the new operator is obliged, inter alia, to pay a sum to the outgoing distributor equal to the
Reimbursement Value for the plants whose ownership is transferred from the outgoing distributor to the new
operator. Specifically, M.D. No. 226 provides that the incoming operator acquires ownership of the facility
on payment of the reimbursement to the outgoing operator, with an exception for any portions of the facility
already under municipal ownership or which become municipally owned as a result of any free donations.
As a result of these regulations, there could be cases in which the amount to be reimbursed is lower or higher
than the value of the Regulatory Asset Base (RAB).
9







The RAB of the Italgas Reti Group5 on 31 December 2015 was approximately 5.7 billion6, as the sum of the
Local RAB (as defined in "Glossary of Terms and Legislation relating to the Issuer" below) of
approximately 5.4 billion and the Centralised RAB (as defined in "Glossary of Terms and Legislation
relating to the Issuer" below) of approximately 0.3 billion.
At the date of this Base Prospectus, Italgas estimated that the Reimbursement Value of the total portfolio of
the concessions of the Italgas Group, net of free assignments, was approximately 5.6 billion based on the
method provided for by Article 5 of M.D. No. 226, as amended, and by the Guidelines (as defined in
"Glossary of Terms and Legislation relating to the Issuer" below), making an exception for concessions that,
based on the aforementioned regulation, provide for specific contractual stipulations regarding the
calculation of the Reimbursement Value (Roma Capitale, City of Venice, Naples and other smaller
municipalities). Pursuant to the legislation in force, these specific contractual agreements prevail over the
general criteria set out in the Guidelines and result in:
(i)
prior to the issuance of Decree 164/2000, from concessions awarded by direct negotiation;
(ii)
subsequently and until the issuance of MD 226, by tender announced by individual municipalities
with very different rules between tenders;
(iii)
with the publication of MD 226 and the obligation to carry out the Local Tender Processes, such
differences shall be overcome through the adoption of a notice and tender specifications, in addition
to a standardised service agreement.
It is possible that the Reimbursement Value of the concessions resulting from the Tenders, where a third
party is an assignee, will be below the value of the RAB. Such a case could have significant negative effects
on the assets and the balance sheet, income statement and financial position of the Italgas Group.
In 2012, Italgas Reti won the tender awarding the concession for a natural gas distribution service in the
municipality of Rome, which represents the most significant concession in Italgas' portfolio (Roma Capitale
concession includes about 1.3 million RPs out of a total for the Italgas Group of about 6.5 million, equal to
approximately 20%). Upon the outcome of the tender, for which the Local Tender Processes regulation still
did not apply, a service agreement was signed for a term of 12 years, which is due to expire on 20 November
2024. The municipality of Rome has made the network, facilities and buildings instrumental to the service
available to Italgas Reti for the entire term of the service agreement.
The Reimbursement Value as of 31 December 2015 for the Roma Capitale concession was estimated by
Italgas Reti to be approximately 1 billion. This amount is equal to the total of:
the amount paid to the municipality of Rome at the beginning of the concession (November 2012) as a
one-off payment for the management of the service (874.7 million), net of amortisation as of 31 December
2015 calculated for the duration of the agreement and on the basis of the remaining Reimbursement Value at
the end of the concession (299.6 million), as provided for in the agreement; and
the value of cumulative investments starting at the beginning of the concession, in accordance with the
provisions set out in the agreement, and, in particular, with reference to their partial acknowledgement within
the Reimbursement Value, net of related amortisation. The contractual terms of the concession signed with

5 Italgas Reti Group means, collectively, Italgas Reti (previously called Italgas S.p.A.) and the companies directly or indirectly
controlled by it, pursuant to Article 2359 of the Civil Code, prior to the Demerger (see "Description of the Issuer" ­ Recent
separation from Snam Group").

6 RAB as of 31 December 2015 refers to the last RAB defined for regulatory purposes (RAB for tariff definition 2015), increased by
the investments made in 2014 and 2015 and reduced by the share of annual depreciation and amortisation for 2014 and 2015.

10