Fitch affirms SACE now under Italian government control

(Fitch, Milan, 29 November 2022) Fitch Ratings has affirmed that SACE's shares were transferred back to the national government from Cassa Depositi e Prestiti SpA (BBB/Stable) in March 2022, changing SACE's mission from an unregulated export credit insurer to a government agency underwriting insurance policies backed by a state guarantee. The Ministry of Finance [now] retains governance rights over SACE and outlines operational features, according to which SACE operates on behalf of the national government.  Fitch expects insurance-related costs to increase in 2023 alongside the macroeconomic volatility triggered by the Russia-Ukraine war and rising commodities prices that could adversely affect Italian export and domestic activities in the short term. SACE's exposure to Russia, Ukraine and Belarus is limited and was fully covered with EUR91 million provision as of June 2022. As we noted last month, the Italian government is considering support for international fossil fuel projects that would emit 3.5 times Italy’s annual emissions, despite major climate promises. Italy is also considering the nationalization of an oil refinery owned by Russian energy giant Lukoil as well as  providing additional guarantees by Italian export credit agency SACE for the purchase of oil outside Russia and selling the refinery to a third-party investor.