European Commission approves €23 billion Italian renewable energy support scheme

12 Jun 2026 08:00 CEST

June 12, 2026

ZENITH ENERGY LTD.

("Zenith" or the "Company")

European Commission approves €23 billion Italian renewable energy support scheme

Zenith Energy Ltd. (LSE: ZEN; OSE: ZENA; XSAT: ZENA SDR), the international
energy production and development company, is pleased to note the European
Commission’s approval, announced on June 8, 2026, of a €23 billion Italian State
aid scheme to support electricity production from renewable energy sources (the
"Scheme"), a development the Company believes carries significant positive
implications for its 188.5 MWp Italian solar development portfolio, held through
its wholly-owned Italian solar subsidiary, WESOLAR S.R.L. ("WESOLAR").

Highlights

• The European Commission has approved a €23 billion Italian State aid scheme
under the Clean Industrial Deal State Aid Framework ("CISAF") to support new
renewable electricity generation in Italy, including solar power, onshore wind,
hydropower and sewage gas.

• The Scheme is expected to support the addition of approximately 37.15 GW
(Gigawatt) of new renewable electricity capacity in Italy, equivalent to
approximately 48% of the country’s current installed renewable capacity.

• Support will be provided through two-way Contracts for Difference ("CfDs")
with a duration of 20 years, providing producers with long-term revenue
visibility based on a defined strike price for each kWh of electricity produced
and fed into the grid.

In practical terms, the two-way CfD operates through a symmetrical adjustment
mechanism. If the reference market price of electricity falls below the agreed
strike price, the Italian State pays the producer the difference. Conversely, if
the reference market price rises above the strike price, the producer returns
the excess amount to the State. This mechanism effectively stabilises the
revenue received for each eligible kWh at the strike price throughout the
20-year term, reducing exposure to market volatility while preventing windfall
gains when electricity prices are unusually high.

• Solar and wind projects with a capacity above 1 MWp will be awarded CfDs
through a transparent competitive bidding procedure, where applicants will be
required to satisfy pre-selection criteria under the Net Zero Industry Act.

• Renewable energy installations with a capacity below 1 MWp are eligible to
access the scheme directly, with the applicable strike price determined
administratively by the Italian energy regulator, ARERA (Autorità di Regolazione
per Energia Reti e Ambiente).

• WESOLAR expects to qualify for the Scheme and intends to participate with its
projects in the forthcoming competitive procedures, subject to the completion of
a project-by-project assessment, with a view to securing long-term contracted
revenues across the Company’s 188.5 MWp Italian solar development pipeline.

• WESOLAR has several projects with individual capacities below the 1 MWp
threshold, allowing them to benefit from the particularly favorable conditions
available under the scheme.

Relevance for Zenith's Solar Strategy

The award of 20-year Contracts for Difference under the Scheme would
fundamentally transform the investment profile of WESOLAR's project portfolio,
delivering two distinct and material benefits for Zenith:

• a significantly enhanced access to construction financing, and
• a substantially stronger market for asset disposals.

On financing, the CfDs converts what are currently development-stage assets into
long-term, predictable income streams backed by the Italian State. For lenders
and infrastructure debt providers, sovereign-guaranteed revenue removes price
risk, which is the single greatest barrier to project financing. The result is a
materially more bankable portfolio, with access to deeper pools of capital on
more favorable terms.

On asset sales, the same sovereign-backed contracted revenues that attract
lenders also transforms WESOLAR's completed projects into compelling acquisition
targets for institutional investors including pension funds, sovereign wealth
funds, and infrastructure allocators that deploy long-term capital into this
type of asset. CfD-backed solar projects command premium valuations and are
significantly more liquid than standard assets, giving Zenith a clear and
accelerated access to capital.

These two benefits directly underpin Zenith's growth strategy: use financing to
build, then sell a part of the completed assets at strong valuations and
redeploy that capital into the next phase of pipeline development.
Furthermore, Zenith’s strategy to develop a portfolio predominantly comprising
projects below the 10 MWp threshold, located in areas classified as suitable for
renewable energy development, including under the Italian Government’s most
recent decree-law, is contributing to significantly faster grid-connection
procedures and permitting processes.
The Company's first operational asset cluster, comprising three solar plants in
Puglia with a combined capacity of 7 MWp, is expected to commence construction
in July 2026, with commissioning targeted for Q4 2026.

Andrea Cattaneo, Chief Executive Officer, commented:

"The European Commission's approval of this €23 billion scheme marks a major
milestone for the Italian renewable energy sector and creates a highly
supportive environment for solar project development. For Zenith, the
introduction of 20-year Contracts for Difference has the potential to
significantly enhance the attractiveness of our Italian solar portfolio by
providing long-term revenue visibility and strengthening access to both project
financing and institutional capital. We believe the scheme further reinforces
the value of our development pipeline and positions the Company favourably as
Italy accelerates its transition towards renewable energy."


Further Information:

Zenith Energy Ltd
Andrea Cattaneo, Chief Executive Officer
Tel: +1 (587) 315 1279
E: info@zenithenergy.ca


Notes to Editors:

Zenith Energy Ltd. is a revenue generating, independent energy company with
energy production, exploration and development assets in North Africa, the US
and Europe. The Company is listed on the London Stock Exchange Main Market (LSE:
ZEN), the Euron-ext Growth of the Oslo Stock Exchange (OSE: ZENA) and on the
Spotlight Stock Market in Sweden (XSAT: ZENA SDR).

Zenith's strategic focus is on pursuing development opportunities through the
development of proven revenue generating energy production assets, as well as
low-risk exploration activities in assets with existing production.
For more information, please visit: www.zenithenergy.ca

Twitter: @zenithenergyltd

LinkedIn: https://bit.ly/3A5PRJb

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