Terna — Capital/Financing Update 2022

Feb 2, 2022

The issuance has been very successful in the market with an orderbook at peak of over € 4 billion

TERNA SUCCESSFULLY ISSUES FIRST EVER HYBRID GREEN BOND WORTH € 1 BILLION

Subordinated, non-convertible and perpetual bond will pay a coupon of 2.375%

The group led by Stefano Donnarumma confirms its strategy of combining sustainability and growth to promote the energy transition

Rome, 2 February 2022 – Terna has today successfully launched first ever issue of non-convertible, perpetual, subordinated hybrid bond for institutional investors, amounting for a nominal amount of € 1 billion.

The issuance, with an orderbook characterized by high quality and broadly geographically diversified investors, has been very successful in the market with a maximum demand of over € 4 billion, approximately 4 times the offered amount. The issue, authorised by the Board of Directors on 18 January 2022, has been rated "BBB-" by Standard and Poor's, "Ba1" by Moody's and "BBB" by Scope. Taking into account the subordinated nature of the hybrid bonds and the potential to defer interest payments, the equity content for rating agencies is equal to 50%.

The bond is perpetual, non-callable for six years and has an issue price equal to 99.586%, with a spread of 2121 basis points over the Midswap. The issue will pay an annual coupon of 2.375% until the first reset date scheduled on 9 February 2028 and will have an effective rate equal to 2.45%. From this date, if the bond has not been called, the hybrid bond will pay annual interests equal to the 5-year Euro Mid-Swap rate plus an initial spread of 212,1 basis points. This will be increased by a further spread of 25 basis points from 9 February 2033 and an additional increase of 75 basis points from 9 February 2048.

An application will be made for the hybrid bond to be listed on the Luxembourg Stock Exchange.

The hybrid bond issue adds further flexibility to Terna's financial profile and helps to strengthen the Group's balance sheet, further diversifying the investor base. The net proceeds from the issue will be used to finance the company's eligible green projects, selected or to be selected on the basis of Terna's Green Bond Framework, drawn up in compliance with the "Green Bond Principles 2021" published by the International Capital Market Association (ICMA) and the EU Taxonomy, aimed at facilitating sustainable investments.

The strategy of the Group led by Stefano Donnarumma thus confirms its focus on combining sustainability and growth to promote the current energy transition and generate ever greater benefits for Italy and all its stakeholders. In this respect, the company has outlined and published a Green Bond Framework to facilitate the transparency and quality of the green bonds issued. The Framework and the second party opinion, prepared by the independent advisor Vigeo Eiris, are available to the public on company's website (www.terna.it).

Terna's green bond hybrid issue was placed by a pool of banks consisting of BNP Paribas, Banca Akros, BofA Securities, Citi, Credit Suisse, IMI-Intesa Sanpaolo, Mediobanca, Santander, Société Générale, SMBC Nikko and UniCredit.

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This press release (the "Press Release") (including the information contained herein) does not constitute or is part of an offering or an invitation to purchase the Notes issued by the Company. Furthermore, this Press Release does not constitute a prospectus or other offering document. No action has been taken or will be taken by the Company that would permit an offering to sell or an invitation to purchase the Notes in any jurisdiction where actions for such purposes are required. It is forbidden to distribute this Press Release in any jurisdiction where actions for such purpose are required. Persons into whose possession this Press Release comes are required to inform themselves about and to observe any such restrictions. In particular, this Press Release (including the information contained herein) does not constitute or is part of an offering of the Notes in the United States of America, Japan, Australia or Canada and shall not be distributed, directly or indirectly, in such jurisdictions. The Notes have not been and will not be registered under the United States Securities Act of 1933, as subsequently amended (the "Securities Act"), nor under any law applicable to financial instruments of the United States of America or any other jurisdiction, and may not be offered or sold in the United States of America without a registration or a specific exemption from registration under the Securities Act. The distribution of this Press Release may be restricted by regulatory provisions. Individuals in jurisdictions where this release is distributed, published or circulated should inform themselves of and comply with such restrictions. In the United Kingdom this Press Release is directed only to: (i) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), and qualified investors under Article 49(2) from (a) to (d) of the Order, and (ii) to whom this Press Release may otherwise be lawfully communicated (together being referred to as "Relevant Persons"). This Press Release must not be acted or relied upon by persons who are not Relevant Persons. Any investment or investment activity, to which this Press Release relates, is considered in the exclusive interest of and only addressed to the Relevant Persons and will be undertaken only with Relevant Persons. Any person who is not a Relevant Person should not act on or rely on this release. The documentation relating to the issuance of the Notes is not and will not be approved by CONSOB (the Italian Securities Exchange Commission) pursuant to the applicable laws. Therefore, the Notes

may not be offered, sold or distributed to the public in the territory of the Republic of Italy, other than to qualified investors, as defined by Article 2(1)(e) of the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 (the "Prospectus Regulation") and any applicable legal or regulatory provision or in other circumstances in which an exemption from the obligation to publish a prospectus is applied, by Article 35(1)(d) of CONSOB Regulation No. 20307 of 15 February 2018, pursuant to Article 100 of Legislative Decree No. 58 of 24 February 1998 (the "Consolidated Finance Act"), as amended, and pursuant to Article 34-ter of CONSOB Regulation No. 11971 of 14 May 1999 (the "Issuers Regulation"), as amended from time to time, or in the other circumstances set forth under Article 100 of the Consolidated Finance Act or the Issuers' Regulation or the Prospectus Regulation, in any case in compliance with laws and regulations or requirements imposed by CONSOB or other Italian Authority.