Thank you for standing by, and welcome to the Terna First Half twenty twenty one Consolidated Results Conference Call. At this time, all participants are in listen only mode. There will be a presentation followed by question and answer session. I must advise you that your conference call is being recorded today, Thursday, 07/29/2021. I would now like to hand over to your speaker for today, Mr.
Stefano de Narumas, CEO. Please go ahead.
Good afternoon, everybody, and welcome to Turner's first half twenty twenty one presentation. Let me start as usual with an overview of the Italian electricity market. As you can see in this chart, in the first six months of twenty twenty one, national demand was about 155 terawatt hours, an increase of 7.8% versus the same period of 2020 when national demand was about 144 terawatt hours. Let me highlight that in the month of April, we measured the strongest increase over the last twelve months, namely about 22% compared to April 2020. This was mainly due to the impact of COVID during the spring twenty twenty.
Regarding national net total production, this stood at 154 terawatt hours with a noticeable increase in wind production, which grew by 4%. Moreover, let me also underline that in the 2021, renewable sources covered about 58 of the demand and about 44% of the national net total production, confirming the strong growth trend for renewables in Italy. To cope with the deep transformation due to the increase in renovables, TERNA has answered with the investments foreseen in this new ten year development plan. In this regard, I would like to give you an overview of our new 2021 development plan presented just a few weeks ago. Turning to the next slide.
The new 2021 development plan provides for a strong acceleration in investments, the highest ever reflecting the important historical moment we are living. This plan is fundamental to achieve the decarbonization targets set by Italy and Europe. Specifically, as shown in the chart, the new ten year development plan foresees more than $18,000,000,000 investments over the next ten years for the Italian electricity grid, an increase of 25% compared to the previous ten year plan. This will support and enable to energy transition following the development and integration of renewable sources contributing significantly to achieving the ambitious target of European Green Deal thus strengthening our role as Director and enabler of the transition energy transition process. The plan foresees over 30 new strategic projects including the increase of transport capacity, the rationalization of the main metropolitan areas, the strengthening of foreign interconnections and the increase of system safety and resiliency.
Moreover, please bear in mind that the transmission grid investments are directly related to the reduction of emissions and considered sustainable according European taxonomy criteria. The benefit for the system that this plan will generate are significant as I am going to show you in the next slide. First of all, according to our estimates, the project foreseen over the planned period will allow a 5,600,000 tons reduction of CO2 emissions per year. Moreover, I will allow the removal of almost 5,000 kilometers of infrastructure that will progressively become obsolete with the great benefit for the impacted territories. In order to increase the exchange capacity across the borders, the plant for this six gigawatts more coming from interconnections with foreign countries.
While at the national level, it foresees a 48 gigawatts of exchange capacity between market zones. In addition, there will be a big push towards the integration of renewables. Indeed, a 40 gigawatts of new renewable capacity have been planned. At the same time, the plan will also support the gradual closure of most polluting plants in line with the national and European decarbonization targets. All the above mentioned elements will ensure an increasing grid resiliency, quality of service and efficiency with a reduction of energy not supplied in the region of 70%.
Finally, let me underline that all our main investments are subject to a cost benefit analysis. This will not just guarantee the achievement of Italian and European decarbonization targets in full safety, but will also be crucial to reduce the energy bill to the final users. Now after this introduction, let's move to the first half twenty twenty one key features. Turning to the next slide. In the 2021, group revenues and EBITDA were up by 64%, respectively, compared to last year, which means 76,000,034 higher than first half twenty twenty.
Moreover, we reported a group net income of $385,000,000 $7,000,000 higher versus last year. Group CapEx stood at $6.00 $2,000,000 41% more versus first half twenty twenty. This robust CapEx acceleration driven by system needs once again confirms TERM as the Director and the Neighbor of the Energy Transition in line with our twenty twenty one-twenty twenty five Industrial Plan. To support this double digit acceleration, our net debt stood at $9,700,000,000 versus about $9,200,000,000 at 2020 year end. Now, I leave the floor to the CFO, Agostino Skornajenki, for a deeper analysis of the figures.
Turning to the next slide. Thank you, Stefano, and welcome again, everybody. Let's start with revenues analysis. Total revenues in the 2021 increased by 6.4%, reaching $1,259,000,000 dollars up by $76,000,000 versus last year. The growth was mainly attributable to regulated and non regulated activities, which contributed for 68,000,000 and $17,000,000 respectively.
Let's now go into the details, moving to the next slide. Regulated revenues reached $1,093,000,000 dollars $68,000,000 better than last year. The increase was mainly due to the investment acceleration realized in the National Grid to cope with the ongoing energy transition process, as explained by Stefano. Nonregulated and international revenues reached $165,000,000 4.7% higher than last year. Nonregulated growth was mainly attributable to the increased contribution coming from Tamini and Bruck and higher revenues from connectivity services.
International revenues decreased by $10,000,000 mainly as a consequence of slowdown of activities of construction sites in Brazil caused by COVID-nineteen pandemic. Now, let's go through operating cost analysis at Page 11. As you can see in the chart, total operating costs stood at $348,000,000 13.4% higher than last year. The increase more broadly reflects the business acceleration delivered. Indeed, regulated operating expenses were up by $15,000,000 mainly as a consequence of the increase of our asset base and one off items.
Non regulated OpEx dynamic was mainly related to perimeter expansion effect connected with the full consolidation of group. Let me now analyze EBITDA moving to the next slide. Considering the above mentioned effects, first half 'twenty one group EBITDA reached $910,000,000 $34,000,000 better than last year. The increase was mainly attributable to regulated activities, which contributed for about 53,000,000 versus last year, showing an EBITDA of $882,000,000 in the 2021. Please be reminded that first half twenty twenty non regulated activities were positively impacted by an off component related to Brook acquisition.
Let's now have a look to the lower part of the profit and losses. Turning to the next slide. Depreciation and amortization amounted to $326,000,000 The increase versus last year was mainly due to the impact of new assets becoming operational in the period. As a consequence, EBIT reached $585,000,000 $11,000,000 higher versus first half twenty twenty. We reported net financial expenses of $41,000,000 substantially in line with the same period of last year.
Taxes stood at $158,000,000 $3,000,000 higher versus last year. As a consequence, tax rate stood at 29%, almost in line with the same period of 2020. As a result, group net income reached $385,000,000 $7,000,000 higher versus the same period of last year despite higher depreciation and amortization linked to the investment acceleration. Thanks to these results, we can confirm all 2021 provided guidance. Moving to CapEx analysis at Page 14.
In the first six months of 2021, total CapEx amounted to $6.00 2,000,041 percent higher than last year, showing double digit acceleration to drive the ongoing energy transition process and to contribute to the Italian economic recovery. Indeed, we invested about $571,000,000 in regulated activities. Among the main projects of the period, it is worth mentioning the realization of new lines as, as example, the Patternop Pantano Briolo in Eastern City, the Italy France interconnection and the rationalization of Turin's metropolitan area. On top of that, the investment in stabilization devices such as synchronous compensator, mainly located in Southern Italy, that will allow to enhance grid stability. Non regulated and other CapEx stood at 31,000,000 This includes capitalized financial charges and other investments.
Regarding net debt and cash flow analysis. Net debt at the June 2021 was 9,735 million dollars $562,000,000 higher than twenty twenty year end level, mainly as a consequence of the CapEx acceleration made on the National Grid, the payment of the 2020 final dividend made in June and the cash taxes payment. We generated an operating cash flow of $672,000,000 thanks to which we were able to more than cover CapEx spending of the period. Let's now make a deeper analysis of our debt profile moving to Page 16. As you know, TEDMA follows a prudent and proactive debt management approach aimed at keeping a solid and diversified financial structure.
Indeed, at the end of this first half, we registered a fixed over floating rate of gross debt of 89% and an average duration of more than five years. In line with our strategy of combining sustainability and growth to promote energy transition, let me just remind you that in June, TERMA successfully launched a new green bond for nominal amount of $600,000,000 and an effective cost equal to 0.398%. The issuing was very successful in the market with an order book uptick of over $2,200,000,000 four times more the offered amount. Moreover, in July, TERMA signed an agreement for a $300,000,000 loan with European Investment Bank in very competitive condition, a twenty two year loan to strengthen and develop the national transmission grid supporting the twenty twenty one-twenty twenty five industrial plan. Thank you very much for your attention.
Now, before the Q and A session, let me leave the floor to Stefano for his closing remarks. Thank you. Thank you, Agostino. Let me conclude this presentation with some closing remarks. Firstly, as you appreciated from the previous illustrated chart, we again reflected important signs of recovery of the Italian electricity demand with an 80 increase in the 2021 compared to the same period of the last year.
This is also the evidence of the Italian economy relaunch. In this regard, it's important to underline that our investments will be fundamental to relaunch our country's economic growth, employment and technological innovation. Indeed, let me highlight that every $1,000,000,000 invested in infrastructures generates between 2,000,000,000 and $3,000,000,000 in terms of GDP and allows for the creation of new jobs. Moreover, to our investment, we will also contribute to the achievement of the challenge decarbonization targets set at the national and European level. These targets are crucial as confirmed also by the Fit for 55 package presented just a few days ago by the European Commission.
This new package is a comprehensive set of measures to achieve the ambitious target of 55% emissions reduction by 02/1930. Within this context, TENNA will keep strengthening its role as a director and enabler of the transition. In the meantime, we are committed to maintain a solid financial structure and another greater return for our shareholders. Moreover, we can also confirm all the provided guidance for 2021. Thank you for your attention.
We are now ready to open the Q and A session.
Thank We have the first question coming from the line of Enrico Bartoli from Stifel. Please ask your question.
Hi, good afternoon and thanks for taking my questions. First of all, of course, a question regarding the consultation document that has been published by the authority recently regarding working with regulation. In the first sight, it seems a bit tougher considering the wide range that is implied in terms of the allowed return. I was wondering any comments that you can have a possible improvement on these that you are going to propose to the regulator? And in general, if you think that the document is consistent with the general strategic goal to foster investments related to decarbonization and of course you are the main player on this site.
Second question regarding you mentioned the Fit for 55 package. You announced last month the new development plan for the elicitation emission grid. If you think that the new package would provide some additional potential for you to invest in elicited grid and to accelerate decarbonization lead to the FIT45. And the third question is related to results. Just let's say the trend that we saw in EBITDA, the composition between the regulated one and the non regulated of course, the non regulated was also affected by the one off last year, but regulated EBITDA is growing in a very robust way, while even stepping up the one off non would be down in the first half.
Can you comment on this? And if we can expect a similar projection for the second half of the year? Thank you.
Well, good afternoon, this is Agostino Sverdragijk speaking. Well, regarding the first question, and probably Mr. Vanaruma will comment, let me say on Huaxiqi, the first document really describes methodologies, processes and all the variables that are showing a very wide range without any kind of indication of precise values. Therefore, we do not consider possible to identify significant ranges or indicative landing points for the Waukeshi value. I think that we will have more precise indication after the complication of the second consultation document expected in October and more than this at the end of the year when we will receive the final resolution from the authority.
Let me say that we agree with the methodological approach proposed by the authority that as you have seen is fully based on the continuity of regulatory principle and with the concept of graduality in order to avoid, and here I'm looking to the resolution, avoid sudden changes in return levels. This is what is written in the public. As expected, there are several elements that can positively or negatively impact the final return level. Let me give you some examples. For instance, on one hand, the intention of the rig result to take into account the reduction of the cost of corporate debt compared to 2015.
That is a fact. And on the other hand, the openness to redefine the observation periods in order to consider the extraordinary situation we are experiencing due to COVID-nineteen pandemic and also due to the role that central banks has played with their monetary policies last year. I don't know if that answers your Yes, Douglas. In any case, as you mentioned, the final feature will be the result of all these variables. And so the lending point and consequently the impact cannot be estimated to the moment.
But in any case, a reasonable and the gradual impact that can be compensated with our managerial actions. Speaking about the Fit for '55 and the possible opportunity, I think that sure maybe an impact not in few years, more in the second part of the next ten years. More it increases the target for renewables use and installations more we have to consider possible investments, new investments to allow the transition and to help the system. And so, sure, I think that during the next ten, fifteen years, the possible increase of our investments is not only in line with the plan, the ten years plan that we have presented. Speaking about the third question, Agustin, if you want to add.
Yes. Regarding the evolution of our results and the composition of such results, let me refer to Page 12 of the presentation. So the increase in regulated EBITDA is mainly conducted with the increase of the asset base. As you know, after the entry of the main operation of several assets at the 2020, now the tariff has recognized additional revenues on a wider asset base. Regarding non regulated and international, to make a long story short, on one side, we are pretty satisfied about the performance of Tamilion Brook that has been fully integrated in the period, and we are also squeezing already relevant synergies.
On the other hand, as anticipated before, we are facing some delay in our projects in Brazil as a consequence of the pandemic. Thank you.
We have the next question coming from the line of Javier Suarez from Mediobanca. Please ask your question.
Hi, good afternoon and thank you for the presentation. The first one is a follow-up after Enrico's question on the regulatory document that I guess is a very popular theme these days. It's on the assuming, I don't know, theoretical cut of 100 basis points, that seems a worst case scenario looking at the ARERA document. I was wondering if you can give us a sunlight on the possible managerial decision after that regulatory cut. What would be the decision process makers for a company like TERNA?
What would be the priority? And I'm thinking about decisions on CapEx and also on dividends. That would be the first question. The second question is on the ten year plan for the electricity transmission network. Obviously, that is giving plenty of visibility to the company on a significant CapEx for the next decade.
I was wondering if also there could be some additional significant upside coming from the recovery fund. So you can give us your latest thought on the possible positive implication of the recovery fund for a company like Terma. And the third question is, you can and that is more on the numbers of the second quarter. The thing that has called my attention more is the significant increase of CapEx. If you can help us to understand why the company has managed to accelerate CapEx.
Is that coming from the recently approved simplification decree or and that is having a positive impact on the capacity of the company to accelerate on CapEx? Many thanks.
So again, speaking about the YCC review, I think, first of all, this is too early to define the level and the possible impact. But in any case, my opinion and I just say in the past, my opinion is that the regulators track record has always proven to adopt reasonable resolutions that they would be enabled to catch both the historical moment that is so particular to the moment and the needs of the system. Today, more than even considering the ongoing energy transition process and our central role. Then you asked about the for the recovery fund. Yes, fund, no, I just say also the last month that the core refund doesn't impact directly on our activities.
We have also presented some projects, but my opinion is that our scan also for remuneration and for planning may be an enabler for recovery funds main projects. What I think is that it's a good opportunity for the system to invest on parts of the system that are necessary for to guarantee the energy transition process. And we can go at the same speed altogether. Something interesting may arise from the definition of rules for storage, for example, in the next future. And I hope that all together with the system and operators who will find the right way to allow also this kind of implementation because it's really important for the system.
On other side, no direct impact for us. If you want to Yes. Indeed, Navir, the first semester was really a very good one in terms of CapEx consideration. Let me say that at the end of the semester, more or less 50% of the investment has been related to asset renewal and efficiency and the other 50% is related with development targets. In the first three months, we have seen and we already commented in May, if I'm not wrong, that we have registered a massive increase in renewable investment.
In the second part of the semester, also we speed up a lot of relevant development CapEx. Among the main infrastructure, let me mention the new power lines linking Melili in Sicily and Priolo, the connection between Modena North and Modena Aeste in the north part of the country, Fijin and Pirelli close to Florence, Rivoli and Paracas close to Turin. Those assets entered into operation in the first semester. And of course, the construction of these new lines are included in the 2021, 2025 in the plan will continue including the completion of the mentioned Patreno Pantera Priolo line and also with the rationalization of the main metropolitan areas as mentioned by Stefano a few minutes ago. We are also completing the implementation of the installation of a new synchronous compensator, especially in the southern part of the country.
Many thanks.
We have the following questions coming from the line of Harry Wyburd from Bank of America. Please ask your question.
Hi, everyone. Thanks very much for taking my questions. I've got two. The first one, I apologize for those who were also on the SNOMED call earlier, but sort of a copy and paste question, but I think it's equally relevant. I just want to ask very specifically, having seen the initial proposals, I guess there's obviously a big range, but probably there's a fair idea of what the worst case scenario is.
So if you look at that worst case, how do you feel about your dividend policy? Because I guess you've got one of the highest dividend growth policies in the sector, arguably. Do you feel or would you be confident to sort of reiterate that policy now having seen the initial documents? And then the second one is just on the surge in CapEx. And it looks like your annual CapEx could almost triple relative to the very long term average.
And I guess this is occurring in a potentially inflationary environment. What are your views on operational risks in ramping up that quickly? Do you feel confident that you can actually do that and get the necessary, I guess, headcount to do that, the necessary access to raw materials and project management sort of skills and teams in place to actually do that? Or is this something that does require a little bit of higher or does bring a little bit of higher operational risk into the business?
Stefan, it's Emmy. Regarding your first question, again, the document that we have in front of us is describing methodology, processes, general variables. It is not possible to provide any kind of precise indication about the value. The system, We cannot identify ranges of landing point. Worst case, best case, I think that it makes sense to do that now.
Thank you. And thinking about the planning or the CapEx planning for this year, would like to emphasize that just now after the first six months of plan that is five years plan, We have more than 70%, 75% of the project just approved and in the meantime also just covered with material and all the activities that we need. So it's also the reason why we are running in a good speed at a good speed. And I think that we finalized correctly this year in this way and we will have no big progress for the next future. So I don't see any particular activity.
Okay, got it. Many thanks.
We have the next question coming from the line of Jose Ruiz from Barclays. Please ask your question.
Yes, good afternoon. Thanks for taking my questions. The first one is a question to Terna as a TSO. Do you have an estimate of electricity demand growth for Italy for 2021? And the second question is a clarification.
Do you have the cost of debt of the first half? I cannot see in the press release. Thank you.
Okay. About energy consumption, what we see during this month is really a behavior that is similar to a couple of years ago before the COVID period. Sometimes it's also more, but I think the average would be near to a couple of years ago. That means also that Italy system production system and so on is arriving gradually to the same rate of pre COVID period. What is really interesting is that, for example, during the last months, there was a coverage of renewables that was more than 40%.
This is a good signal in terms how to say the energy transition process is going on. Regarding the cost of debt of the period, we are fully in line with the business plan expectation. I remember you that we set 1.3 on the business plan horizon, 1.3 now we are in the region of 1.1, 1.2, so fully in line.
Thank you.
We have the next question coming from the line of Alberto Gandolfi from Goldman Sachs. Please ask your question.
Afternoon and thanks for taking my questions. Apologies to go back again to regulation. But clearly, I take the point that we cannot put specific figures on what the regulator did. But talking about the philosophy, do you believe there is an attempt to narrow the gap between the allowed cost of debt and the actual cost of debt of the company in the new methodology? I'm asking that because I noticed that the regulator is now using an average between seven years and ten years as opposed to ten years.
And your average duration of the debt is on five years. So do you believe this could be the beginning towards the elimination of any debt outperformance? And the second question is related to, again, to regulation, apologies about that. But would you mind elaborating maybe very high level, clearly, you can't disclose at this stage because you don't even know the outcome, what would be those managerial actions towards? Would it be on costs?
Would it be on leverage again? What could you do to mitigate a below expectation outcome from regulation? Thank you so much.
Well, so regarding the first question, the impact on cost of debt and the reflection and the impact of the evolution of cost of debt in the formula, I think that there is something that we already mentioned before, but let me repeat. It is true that the regulator wants to take in account the reduction of the cost of corporate debt respect to the period previous period, respect 2015. This is a fact. So the cost of debt, cost of money is cheaper than before. So it's rational that the authority will keep this in consideration.
But it is also true that the observation period is a sort of nonsense because if you look how the observation period is shaped now, it started in September 2020 and will end in October 2021. That probably is the worst possible observation period ever given that in this period, the market was not a real market, but was fully impacted by extraordinary decision taken by central authorities. This is another factor. And we believe that the authority will make a reasonable approach on this and will propose a reasonable solution. I think that we cannot say more than that.
We trust on this reasonable approach as we believe that this statement is fully reasonable. Regarding the mitigants, as said several times by Mr. Dunlarum, we have taken a conservative approach in the incentives that we've taken in the business plan assumption. We have confirmed the $220,000,000 We hope to get something more from the authorities. There is some process ongoing.
There is some discussion that will be completed in the coming months. So let's see, but we are quite positive on this. And second I would just add that just in these hours is starting another possible consultation. That's also interesting in this. Yes.
Sorry. No, no, no. And of course, the standard tool of companies has cost discipline and free control on our expenses. So we are ready to do all is necessary to confirm our guidance.
That's clear. Thank you. Thanks a lot.
We have the next question coming from the line of James Brand from Deutsche Bank. Please ask your question.
Hello, good afternoon, and thanks for the presentation. I have two questions. The first was actually going be on incentives and the timing, which you kind of touched upon in the answer to that last question. But I'm still a little bit and I think probably most people are a little bit unclear exactly what to be expecting from these kind of new documents on incentives. Should we be expecting just kind of one more document later this year that sets out a set of new incentives?
Or is it a case that we're going to get a kind of drip, drip of there might be one paper later this year that has one new incentive and then maybe there'll be another one next year and it will progressively build? Or so is it that we'll get more all in one go later this year? Or we'll just get a drip, drip over the next coming years of new incentives? That's the first question. And then the second question is on the new investment plan.
I was just wondering how that fits with what you've outlined already. Obviously, it's a bigger number. So should we be expecting when you present your new business plan in Q4 for the overall CapEx spend to be going up? And previously, you were looking at kind of getting up to a run rate of around €2,000,000,000 per annum or maybe a little bit more of CapEx by the mid 2020s. How high could that go now?
Could that be more like $2,500,000,000 run rate by the mid-2020s? Or perhaps you want to just wait until Q4 and the new business plan to answer that, but I thought I'd just see whether you want to say anything on Thank you very much.
Okay. Regarding incentives, as I said before, it started during these hours, the first consultation on this topic, and I think there should will be some other documents and the consultation during the next month. It is a process that is and I think it's also okay, parallel to the what you see definition process. And so it's possible for us in the next month to better understand the complete scenarios and to define our actions and position. And speaking about this, I can say that also for a review of the plan, it would be better to wait for the closing of these definitions.
So I believe more in the beginning of the next year at the moment.
Does that answer your question, James?
Yes. On the incentives, I guess, the investment plan, sorry, did you say you wanted to wait for to give updated guidance on the CapEx? Or I didn't catch the answer to the second question that I asked.
Sorry, can you kindly repeat that we have some noises on the line? Sorry. The
second question, yes, I didn't catch perhaps I just missed it, but I didn't catch the answer to my second question, which was where could CapEx get to by the mid-2020s?
Yes, sorry. For sure, as you have seen also from the level of CapEx, we will see a further acceleration on our investment plan. This is something that we will disclose more in detail at the moment of the update of the business plan. But I've said several times that for sure that we will continue and increase the current investment path.
Okay. Thank you very much.
You're welcome. Sorry.
We have the next question coming from the line of Stefano Gamberini from Equitasium. Please ask your question.
Good afternoon, everybody. A few questions also from my side. First of all, regarding the statements from the regulator that they want to support the energy transition. Many times they wrote this and also during the consultation paper for the yellow oil wax. So on your side, you are the heart of this transition.
You are the enabler of the growth of also renewables. What are the measure that you are asking to a regulator on the other side regarding the development of all the investments that you have to support clearly beside the outperformance in sense that are already on the table? The second question regarding the authorization. In your new ten year business plan, you added, if not from three new interconnectors. There is one of these that is very important, the Lithuanian Link and the second one, the Atelastic one, still waiting for all the authorizations.
So did you find some novelties in the recovery fund that could help or accelerate the authorization process for all these interconnectors? And the third one, what is your view, still again, on the acceleration of investments in the renewables? If I'm not wrong, you underline many times that you have lot of requests. At the end of the day, the authorization are still waiting the process going on. With the new recovery plan, in your view, the measures that have been introduced could accelerate this process or not?
Thanks.
On the role that Determa has in the system, I think at this moment, no doubt coming from nobody. If you think that a few weeks ago, we presented the ten years plan of term and it was also the first time, if I remember well, that together with us, there were present, in presence that the minister and the President of Herrera and we discussed it together in front of everybody on the leading how is important this kind of plan to allow the transition. So I am absolutely sure that this is one of the main aspects that confirm my opinion on the reasonable and the gradual impact and the decision coming from Atoll. Then you asked about the authorization. Yes, we are absolutely on track.
And this also for the big projects because a lot of phases of this authorization are not well known to everybody. So we have divided this process in some really some 100 of phases and we are going on week per week with all the institutions and all the subjects that are involved in this. And we see that everything is going in a good way. So like I said before, I'm not afraid about this. I think we are in line with this.
And in the meantime, there are also some possible accelerations coming from the new rules also related to the recovery plan and the new rules that government is fixed step by step to allow this process and this plan. So I think that also the new CapEx that the system and all the operators are hypothesizing to put on the table on this will be not only possible, but for sure as necessary. So in any case, everybody, we have to find solutions and to help together the system to reach new targets.
Just a quick follow-up, if I may, regarding the investments in Thierryllian Link when this will arrive and could accelerate, if I understood correctly, all the investment in the sector. Do you see some risk about the leverage of them in these years, '24, 2025, considering the huge amount of investment that you have on one side and on the other possible changes in load WACC or incentives that you should receive?
Well, several for sure. There are relevant investments in the business plan. And I think one of the most important, we are talking about 1,900,000,000 out of 3,900,000,000.0 on the total investment cost. That's for sure will have an impact. You remember what we said when we presented the business plan.
The business plan is fully funded, is fully sustainable from a financial perspective. Now we have something to be checked. On one hand, the evolution of the interest rates that, of course, we are looking some expectation of a certain level of increase. And the second one, as said before, will be the approach, the reasonable approach, let me mention it again, expected by the authority to cover also this. Having said that, we are not worried about this.
We already announced when you presented the business plan that even if the business plan is fully sustainable based on the judgment given by the three rating agencies, we consider the level of our rating important and we already announced that if needed, we are also ready to introduce some different tools or some different action including some nonstandard financing instrument as an hybrid or something similar like that. Only if needed. Thanks a lot.
There are no further questions at this time. Please continue.
Well, thank you very much for your time and see you next time. Thank you. Thank you to everybody. See you.
Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect your lines. Thank you very much and have a