Obligation Irenne S.p.A. 3% ( XS1086104681 ) en EUR

Irenne S.p.A.

100 % ⇌

Italie

XS1086104681 ( en EUR )

3% par an ( paiement annuel )

13/07/2021 - Obligation échue

Prospectus brochure de l'obligation Iren S.p.A XS1086104681 en EUR 3%, échue

100 000 EUR

300 000 000 EUR

Iren S.p.A. est une société italienne multi-services qui opère principalement dans les secteurs de l'eau, de l'énergie et des déchets, fournissant des services publics à plusieurs municipalités en Italie.

L'Obligation émise par Irenne S.p.A. ( Italie ) , en EUR, avec le code ISIN XS1086104681, paye un coupon de 3% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 13/07/2021

Prospectus
IREN S.p.A.
(incorporated with limited liability under the laws of the Republic of Italy)
300,000,000 3.00 per cent. Notes due 14 July 2021
The 300,000,000 3.00 per cent. Notes due 14 July 2021 (the "Notes") of Iren S.p.A. (the "Issuer") are expected to be issued
on 14 July 2014 (the "Closing Date") at an issue price of 99.225 per cent. of their principal amount.
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their principal amount on 14 July 2021.
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. In addition, each holder of a Note may require the Issuer to redeem
such Note at its principal amount upon the occurrence of a Put Event (as defined below). See "Terms and Conditions of the
Notes -- Redemption and Purchase".
The Notes will bear interest from 14 July 2014 at the rate of 3.00 per cent. per annum payable annually in arrear on 14 July
each year commencing on 14 July 2015. 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".
This Prospectus has been approved by the Central Bank of Ireland (the "Central Bank") as competent authority under Directive
2003/71/EC (as amended, including Directive 2010/73/EU, the "Prospectus Directive"). The Central Bank approves this
Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Such approval
relates only to the Notes which are to be admitted to trading on a regulated market for the purposes of Directive 2004/39/EC
and/or which are to be offered to the public in any member state of the European Economic Area. Application has been made to
the Irish Stock Exchange for the Notes to be admitted to the Official List and to trading on its regulated market.
This Prospectus is available for viewing on the Irish Stock Exchange's website (www.ise.ie) and the documents incorporated by
reference herein may be accessed on the Issuer's website (www.gruppoiren.it) (see "Information Incorporated by Reference").
An investment in the Notes involves certain risks. For a discussion of these risks, see "Risk Factors" on page 6.
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 the Closing Date with a common safekeeper for Euroclear Bank S.A./N.V. ("Euroclear") and
Clearstream Banking, société anonyme, Luxembourg ("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. Interest payments in respect of the Notes
cannot be collected without such certification of 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. See "Summary of Provisions
Relating to the Notes in Global Form".
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 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.
Joint Lead Managers
Banca IMI
BNP PARIBAS
Mediobanca
Morgan Stanley
UniCredit Bank
10 July 2014

IMPORTANT NOTICES
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, Mediobanca Banca di Credito
Finanziario S.p.A., Morgan Stanley & Co. International plc and UniCredit Bank AG (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 material fact necessary
to make such information contained herein (in such context) not misleading in any material respect;
and all proper 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 in writing 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 is
correct at any time subsequent to the date hereof or that any other information supplied by the Issuer
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
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 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. 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 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 any of the Joint Lead Managers represents 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.
The language of this Prospectus is English. Certain legislative references and technical terms have
been cited in their original language so 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, Mediobanca Banca di Credito Finanziario S.p.A.
(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 a 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, regulations and rules.
__________________________
CERTAIN DEFINED TERMS
In this Prospectus, unless otherwise specified:
(i)
references to "billions" are to thousands of millions;
(ii)
references to the "Conditions" are to the terms and conditions relating to the Notes set out in
this Prospectus in the section "Terms and Conditions of the Notes" and any reference to a
numbered "Condition" is to the correspondingly numbered provision of the Conditions;
(iii)
references to "", "EUR" or "Euro" are to the single currency introduced at the start of the third
stage of the 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
(iv)
"Iren" or the "Issuer" means Iren S.p.A.;
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(v)
the "Iren Group" or the "Group" means the group consisting of the Issuer and its consolidated
subsidiaries; and
(vi)
references to a "Member State" are references to a Member State of the European Economic
Area.
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TABLE OF CONTENTS
RISK FACTORS __________________________________________________________________ 6
INFORMATION INCORPORATED BY REFERENCE_____________________________________ 19
TERMS AND CONDITIONS OF THE NOTES __________________________________________ 21
SUMMARY OF PROVISIONS RELATING TO THE NOTES IN GLOBAL FORM________________ 42
DESCRIPTION OF THE ISSUER ____________________________________________________ 45
SUMMARY FINANCIAL INFORMATION OF THE ISSUER ________________________________ 71
REGULATION ___________________________________________________________________ 80
TAXATION _____________________________________________________________________ 102
SUBSCRIPTION AND SALE _______________________________________________________ 110
GENERAL INFORMATION ________________________________________________________ 112
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RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations 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 the Notes are also
described below.
The Issuer believes that the 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. In addition, the order in which the risk factors are presented below is not intended to be
indicative either of the relative likelihood that each risk will materialise or of the magnitude of their
potential impact on the business, financial condition and results of operations of the Issuer.
Prospective investors should also read the detailed information set out elsewhere in this Prospectus
and consider carefully whether an investment in the Notes is suitable for them in light of the
information in this Prospectus and their personal circumstances, 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 whole of
this Prospectus, including the information incorporated by reference in this Prospectus.
Factors that may affect the issuer's ability to fulfil its obligations under the Notes
The evolution in the legislative and regulatory framework for the electricity, natural gas, waste
and water sectors poses a risk to the Issuer
Changes in applicable legislation and regulation, whether at a national or European level, as well as
the regulations of particular regulatory agencies, including the Authority for Electricity and Gas
(Autorità per I'Energia Elettrica e il Gas) (the "AEEG") and the manner in which they are interpreted
could affect the Group's earnings and operations either 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 sectors in which the Group conducts its business. Such
changes could include changes in tax rates, legislation and policies, changes in environmental, 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 have an impact on the
overall market and particularly the public sector. 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. Regulation of a particular sector affects many aspects of 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 Iren's business, financial condition and results of operations.
The Group is dependent on concessions from local authorities for its regulated activities
For the financial year ended 31 December 2013, the Group's regulated activities (namely, Energy
Infrastructure, Integrated Water Services, Waste Management and Other Services) accounted for 54
per cent of the Group's EBITDA. These regulated activities are dependent on concessions from local
authorities (in the case of water, gas distribution, waste management and public lighting) and from
national authorities (in the case of electricity distribution) that vary in duration across the Group's
business areas. For further information on the concessions granted to Iren and its subsidiaries, their
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original expiry date and the extension regime which such concessions are subject to, see "Description
of the Issuer - Concessions", below. In addition, legislation in Italy could affect the expiry date of
certain concessions (see "Risk Factors - The evolution in the legislative and regulatory context for the
electricity, natural gas, waste and water sectors poses a risk to the Issuer" above and "Regulation of
local public services and expiry of concessions" below). Both in the case of expiry of a concession at
its stated expiry date and in the case of early termination for any reason whatsoever (including failure
by a concession holder to fulfil its material obligations under its concession), each concession holder
must continue to operate 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) and
is subject to penalties or sanctions for the non-performance or default under the relevant concession.
Failure by a concession holder to fulfil its material obligations under a concession could, if such failure
is left unremedied, 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.
No assurance can be given that the Group will be successful in renewing its existing concessions or
in obtaining concessions to permit it to carry on its business once its existing concessions expire, or
that any new concessions entered into or renewals of existing concessions will be on terms similar to
those of its current concessions. Any failure by the Group to obtain new concessions or renew
existing concessions, in each case on similar or otherwise favourable terms, could have a material
adverse impact on the Issuer's business, financial condition and result of operations.
Regulation of local public services and expiry of concessions
Legislation in recent years providing for the early expiry of concessions for local public services has
given rise to concerns as to how it will affect the business of operators in the sector such as the
Issuer. Article 23-bis of Law Decree No. 112 of 25 June 2008 (as amended) provided for the
automatic early expiry of certain concessions that had not originally been awarded on the basis of a
public tender unless the shareholding of public entities in the concession holder was reduced to
certain thresholds, eventually coming down to 30 per cent. However, a referendum in June 2011
revoked Article 23-bis and subsequent legislation fell foul of the Constitutional Court in July 2012, as it
was held to be an attempt to introduce provisions that were analogous to those that had already been
barred by the referendum. The current position is that the expiry of concessions affected by Article 23-
bis will occur on their contractual expiry date or, for those granted for an indefinite period, not later
than the end of 2020.
As stated above, the expiry of any concessions currently held by the Group may adversely affect its
business, results of operations and financial condition, and although the risks posed by legislation in
recent years has for now receded, there can be no assurance that further legislation having a similar
effect will not be introduced in the near future.
Iren's ability to achieve its strategic objectives could be impaired if the Group is unable to
maintain or obtain the required licences, permits, approvals and consents.
The strategic development plan of the Iren Group provides for considerable investments, from the
development of joint ventures of important regasification plants for the gas supply, to the construction
or upgrading of cogeneration plants to complete the district heating (teleriscaldamento) extension
plan, as well as the upgrading of its hydroelectric plants, and the consolidation of its presence in the
electrical energy and gas distribution sectors, and water and waste treatment sectors.
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The above activities entail Group exposure to regulatory, technical, commercial, economic and
financial risks related to the obtaining of the relevant permits and approvals from regulatory, legal,
administrative, tax and other authorities and agencies. The processes for obtaining these permits and
approvals are often lengthy, complex, unpredictable and costly. If Iren and its subsidiaries are unable
to maintain or obtain the relevant permits and approvals, the Group's ability to achieve its strategic
objectives could be impaired, with a consequent adverse impact on the business, financial condition
and results of operations of Iren.
The Group is exposed to revision of tariffs in the 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 ordered the abolition of the national agency for
regulating and supervising water matters, with its functions transferred to the AEEG and the Ministry
for the Environment. Following this change, the tariffs payable by customers in the water sector (as
proposed by the competent district authorities within each district) must be approved by the AEEG.
The tariff method applicable for the years 2014 and 2015 was adopted by the AEEG in December
2013 and, although in March 2014 the Administrative Court of Milan rejected a legal challenge against
the tariff method adopted by AEEG for the years 2012 and 2013, as at the date of this Prospectus
there may still be an appeal against the Administrative Court's decision before the Council of State
and, accordingly, there is still some uncertainty about the tariff system.
Tariff revision may also involve action by the regulator requiring the Group to repay sums to its
customers, as has recently occurred following the issue of resolutions by the AEEG requiring the
repayment to users of the tariff component relating to invested capital and, subsequently, by the
Territorial Agency of Emilia Romagna for water and waste services (ATERSIR), which set the amount
to be paid back by Iren for the period from July 2011 to 31 December 2011 at 2,886,555.
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 of
the 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 in tariffs or in repayments to
customers, these could have a material adverse effect on the Issuer's financial condition and results
of operations.
Risks related to the to the international financial crisis
Since the second half of 2007, disruption in the global credit markets has created increasingly difficult
conditions in the financial markets. These conditions have resulted in decreased liquidity and greater
volatility in global financial markets, and continue to affect the functioning of financial markets and to
affect the global economy. 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 the Republic of 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
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financial system, how long the crisis will last and to what extent the Issuer's business, results of
operations and financial condition may be adversely affected. As a result, 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 affected and its costs of financing may significantly increase. This
could materially and adversely affect the business, results of operations and financial condition of the
Issuer, with a consequent adverse effect on the market value of the Notes and the Issuer's ability to
meet its obligations under the Notes.
Risks related to the demand for natural gas and electrical energy
Trends in electrical energy and gas consumption are generally related to gross domestic product. In
the context of the recent global economic and financial crisis characterised by a deterioration of the
macroeconomic conditions that led to a contraction in consumption and industrial production
worldwide, in 2013 the demand for electrical energy in Italy experienced a reduction by 3.4%
compared to 2012 (from 328.220 GWh to 317.144 GWh). The economic crisis and mild temperatures
also caused a huge decrease in domestic energy consumption in 2013. On the basis of currently
available data, primary energy demand decreased by around 6.4% compared to 2012 (from 74.3 mld
mc to around 69.5 mld mc). In addition, the decrease in demand for energy has put pressure on sales
margins, due also to greater competition, particularly in the natural gas sector. Under these
conditions, without corresponding adjustments in the margins achieved by its sales or without an
increase in market share, the Group's revenues would be reduced and future growth prospects would
be limited, which could have a material adverse effect on the Issuer's business, financial conditions
and result of operations.
The Group faces risks relating to the process of energy market liberalisation, resulting in
greater competition in the markets in which it operates
The energy markets in which the Group operates are undergoing a process of gradual liberalisation,
which is being implemented in different ways and according to different timetables from country to
country. As a result of the process of liberalisation, new competitors may enter many of the Group's
markets in the future. The Group's ability to develop its businesses and improve its financial results
may be constrained by such new competition and the Group may be unable to offset the financial
effects of decreases in production and sales of electricity through efficiency improvements or
expansion into new business areas or markets.
Although the Group has sought to face the challenge of liberalisation by increasing its presence and
client base in free (i.e. non-regulated) areas of the energy markets in which it competes, it may not be
successful in doing so. Any failure by the Group to respond effectively to increased competition may
have a material adverse effect on the Issuer's business, financial condition and results of operations.
The Group faces increasing competition in the energy market
The energy markets in which the Issuer operates are subject to increasing competition in Italy. In
particular, the Issuer 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.
Similarly, in its natural gas business, Iren faces increasing competition from both national and
international natural gas suppliers. Increasingly higher levels of competition in the Italian natural gas
market could entail reduced natural gas selling margins. Furthermore, a number of national gas
producers from countries with large gas reserves have begun to sell natural gas directly to final
customers in Italy, which could threaten the market position of companies like Iren, which resell gas
purchased from producing countries to final customers. An increase in competition could also have
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an impact on the Issuer's income from electricity production and trading activities, which in turn could
have an adverse effect on the Group's business, financial condition and results of operations.
Events, service interruptions, systems failures, water shortages or contamination of water
supplies 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 part of the network or supporting plant and equipment, could result in the
interruption of service or catastrophic damages resulting in loss of life and/or environmental damage
and/or economic and social disruption. For example water shortages may be caused by natural
disasters, floods and prolonged droughts, below average rainfall, increases in demand or by
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 supplies. In addition, 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 also 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. 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. In addition risk arises
from adverse publicity that these events may generate and the consequent damage to the Issuer's
reputation.
Risks related to weather and atmospheric conditions
Iren's business includes hydroelectric generation and, accordingly, Iren is dependent upon rainfall in
the areas where its hydroelectric generation facilities are located. If there is a drought, the output of
Iren's hydroelectric plants is depleted. At the same time, the electrical business is affected by
atmospheric conditions such as average temperatures, which influence consumption. Significant
changes in weather conditions from year to year may affect demand for natural gas and electricity, as
in colder years the demand is normally higher and may also have a negative impact on the electric
generation system in terms of performance of thermoelectric power plants and variability of wind
farms production. Accordingly, the results of operations of the gas and electricity segment and, to a
lesser extent, the comparability of results over different periods, may be affected by such changes in
weather conditions. Furthermore, power plants and natural gas fields are exposed to extreme weather
phenomena that can result in material disruption to the Issuer's operations and consequent loss or
damage to properties and facilities.
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 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, these risks
could cause significant damage to the Group's property, plant and equipment and, in more serious
cases, production capacity may be compromised. In addition, the Group's distribution networks are
exposed to malfunctioning and service interruption risks which may be beyond its control and may
result in increased costs. The Issuer's insurance coverage may prove insufficient to compensate fully
for such losses.
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