Public and private partnerships for the recovery of the country through the NRRP

Tough periods require unprecedent actions and steady nerves. It is with the outbreak of the Covid-19 pandemic and the overall downturn in the economy that the European Commission planned several actions aimed at enabling the recovery of the national economies in the years ahead.

Europe reacts to the pandemic with Next Generation EU (NGEU), a composite and ambitious plan to bring Europe out of recession.

The Recovery and Resilience Facility (RRF) entered into force on 19th February 2021. Its objective is to finance reforms and investments in Member States from the start of the pandemic in February 2020 until 31st December 2026.

To benefit from the support of the RRF, Member States submitted their National Recovery and Resilience Plans (NRRP) to the European Commission. Each plan sets out the reforms and investments to be implemented by end-2026 and Member States can receive financing up to a previously agreed allocation.

The RRF is performance based. The importance of reaching agreed milestones and targets within the specified time is then pivotal, in order to sustain progress and achieve results of the reforms and investments proposed.


The milestones define, in general terms, the relevant administrative and procedural steps:

  • they are qualitative targets to be met through a given NRRP measure (reform and/or investment);

  • they often identify key phases for the implementation of the measures (e.g. adopted legislation, fully operational information systems, etc.).


The targets are the expected results of actions, quantified by measurable indicators:

  • they are quantitative targets to be met through a given NRRP measure (reform and/or investment)

  • they are measured using specifically defined indicators (e.g. km of railways built, square meters of surface area subject to energy efficiency interventions, number of students who have completed training, etc.).

Italy represents the first beneficiary in absolute terms of the RRF, with a total 191,5 billion of Euro throughout the period 2021-2026. Up to circa 69 billion Euro of these fund are recognised as non-repayable grants while 122.5 billion Euro as loans to the member state.

Here below are presented the different missions and the amount of funds that Italy is eligible for.

Italy represents one of the most advanced economies where the funds of the RRF have been studied in order to fulfil the potential. Indeed, Italy presents, since several decades, a structural gap in terms of GDP with respect to other performing and comparable Member States.

That is because the Italian structure, and possibly its discontinuous governing bodies, have affected the financial and commercial strengths of the country, with high but not well-rounded public spending, cutting procedures to infrastructure investments, a high taxation system and few research investments.

However, Italy is a country where excellences are found and the great potential of the NRRP is to create positive externalities, that must be encountered with timely and effective implementation of the reforms and investments included therein, that could furtherly potentiate the attraction of private investments.

Ahead, notwithstanding the actual instability due to the fall of the Draghi government, there are other kind of risks.

Firstly, preventing the possibility that NRRP’s funds will be injected in different industries without a proper allocation or monitoring of the resources. Additionally, in the medium term there could be the arising of individual conviction that NRRP’s funds are always public ones and mostly long-term debt for Italy, so that a direct and individual payoff by enterprises is not perceived.

A viable path to mitigate such risks could be the alignment of the public intervention with those of Institutional Investors and more generally private investment funds. Private and public investors have a unique opportunity to work together in delivering the strategic agenda underpinned by the NRRP.

Indeed, the six missions around which the NRRP is dislocated represent areas of interest for private investment funds.

In the last ten years of activities, private equity funds have greatly allocated capital towards Italian companies that operate in industries such as renewable energy, sustainable agri-food, circular economy, Made in Italy design and fashion, ICT and healthcare.

Indeed, the activities of private equity firm have increased since the end of the lockdowns period, and in 2021 a total of 654 transactions were registered on the Italian private equity and venture capital market, distributed to 488 companies, for a total of 14.7 billion Euro of investments.

These represent the highest values ever recorded in Italy private equity market and the first half of 2022 confirm this trend with more than 200 operations. Inevitably, the NRRP is contributing to the private market booming.

The synergies between public and private is then disclosed, given as the private investment itself is a long-term relationship between funds and companies, and their participation, along with the progressive achievement of milestones and targets, can help private companies in gaining the most from newly reformed condition and from infrastructural investments.

The prospected conditions request to Italian firms to act nowadays to be fully prepared. First, it means to rethinking internal organizational processes, by bettering and making more efficient and resilient the production processes, the marketing strategies, and the management of the company; but it also entails to work on policies that are inclusive for young people and for women, and to set as an overall objective the sustainability of the company’s performances and impacts.

By private investing, therefore, European and non-European funds can contribute to the recovery of the country, by encouraging long-term investments which will make possible to preserve the generational shift that is happening, committing new generations and, consequently, new entrepreneurs, governors and investors to preserve the sustainability of the overall society and the environmental and social transition.

The NRRP has the potential to unlock the streghts of the country and to intervene in the mitigation of its weaknesses. However, it emerges as such ambitious long-term plan is also determine by the governing authorities, and the actual political crisis in Italy is likely to slow the achievement of milestones and targets, contrasting with the leading position covered by the country in the past 18 months, with Draghi government and authority in following the agenda and coping with subsequent emerging challenges.

Will the next governing class be able to pick up the baton from Draghi government and continue the recovery plan of our country?




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