The SFNIISSI Fund opens a narrow three-week window on €1 billion in funding. But attention must be paid to operational risks. Once again, reporting becomes a strategic activity in order to truly secure the allocated funds.
What to know about the SFNIISSI Fund
With the notice published at the end of April 2026, Invitalia opened applications for the National Financial Instrument for Infrastructure Investments and Security in the Water Sector — SFNIISSI.
It differs from PNIISSI because it operates on a different logical framework. PNIISSI identifies the infrastructure interventions considered priorities for the national water system, classifies them according to their level of strategic importance (the A, B and C classes referenced in the evaluation criteria), and regulates their drafting and updating criteria. Part of these interventions has already been covered by the implementation tranche established by Ministerial Decree MIT No. 223 of 16 September 2025.
SFNIISSI, established under Article 24 of Decree-Law No. 19 of 19 February 2026, converted into Law No. 50 of 20 April 2026, is instead the financial instrument implementing Investment 4.5 of Mission 2 — Component 4 of the PNRR. In other words: PNIISSI identifies which interventions are priorities, while SFNIISSI provides the resources — following a logic more similar to bank financing integrated with a public grant than to a traditional contribution scheme.
H3 What the SFNIISSI Fund finances
The notice identifies two lines of intervention.
Line 1 covers interventions included in PNIISSI (Annex 1 to the Prime Ministerial Decree of 17 October 2024) that have not already been financed under the implementation tranche of Ministerial Decree No. 223 of 16 September 2025.
Line 2 finances water-sector interventions included in Annex IV of Decree-Law 77/2021 — including the Campolattaro dam derivation works and the safety upgrading of the Peschiera water system — with a maximum allocation of €300 million.
Projects must pursue one of two main objectives: improving the efficiency of water resource use and infrastructure resilience, or reducing water losses through digitalisation.
Aid intensities reflect these priorities: up to 90% for the first objective and up to 85% for the second, with minimum co-financing requirements of 10% and 15% respectively.
In line with the DNSH principle, investments linked to fossil fuels, the construction of new dams and interventions falling under Article 4(7) of Directive 2000/60/EC are excluded.
H3 Who can apply
Applicants must be integrated water service operators accredited in the ARERA registry (or operating in compliance with the rules in the Autonomous Provinces of Trento and Bolzano), holders of water abstraction concessions, duly incorporated and compliant with social security and contribution obligations.
For Line 2, participation is also open to non-economic public entities, provided they guarantee a coherent timetable for procurement and commissioning of the infrastructure.
Joint applications are explicitly rewarded, with five points allocated under the “Forms of aggregation” criterion, in order to encourage rationalisation among operators.
The timeline
The deadlines are known — and tight:
• 29 April 2026: accreditation opens on the SFNIISSI platform
• 6 May 2026 (12:00): applications open
• 19 May 2026: deadline for clarification requests
• 28 May 2026 (12:00): deadline for submission of applications
• 30 June 2031: final deadline for technical and administrative completion testing of interventions
A window of just twenty-two days to prepare an application requiring a project proposal (at least at DOCFAP level), CUP, a certifiable Economic and Financial Plan (PEF), a climate tagging report, authorisations from the EGATO or the proposing entity within PNIISSI, and a payment delegation for Line 2.
How the evaluation works
The procedure has defined the criteria for ranking applications. However, there are two additional aspects worth understanding — issues we frequently encounter in projects carried out for our clients: where applications stall before approval, and where problems emerge afterwards.
The SFNIISSI ranking criteria
The ranking is based on 100 points distributed across five criteria: priority/strategic level of the intervention (35), project maturity (25), percentage of co-financing (25), complementarity with PNRR M2C4-I4.1 and I4.2 projects (10), and forms of aggregation (5).
The weight assigned to the “project maturity” criterion deserves particular attention: a standalone DOCFAP scores zero points, whereas a verified, validated and approved PFTE 36/2023 for integrated procurement scores 23 points, and a verified executive project scores 25. The gap between these positions is difficult to compensate elsewhere.
The message is clear: this is not a call for projects still in their early stages.
Three mistakes to avoid when applying to the SFNIISSI Fund
1. An economic plan focused only on the present. The fund covers the profitability gap, but it requires a bankable plan covering the entire lifecycle of the infrastructure, which often extends well beyond the current concession period. A properly structured economic plan must demonstrate the robustness of the intervention throughout the project’s full lifespan, including scenarios involving the replacement of the operator.
2. Treating climate documentation as a mere formality. SFNIISSI is a PNRR measure: it must clearly document its contribution to European climate objectives, which must be substantiated intervention by intervention, not simply referenced. Generic reports lacking this level of detail risk being penalised or deemed inadmissible during the application phase.
3. An application disconnected from the EGATO. The operator does not decide alone: without the formal commitment of the area authority to incorporate the intervention, the proposal loses solidity.
Without that commitment, the operator is effectively submitting a project that its own local governance body has not yet formally endorsed; the evaluation committee may therefore interpret this as a sign of project immaturity, penalising the application accordingly.
Three critical issues to monitor during SFNIISSI reporting
1. Traceability and accounting codes. Every administrative and accounting document must include CUP, SFNIISSI CLP and CIG references. Each expenditure item must relate to costs genuinely incurred, paid and exclusively attributable to implementation of the intervention. Failure to include even a single code on a payment order may render the expenditure ineligible in the eyes of the Implementing Partner, with the cost reverting to the beneficiary.
2. Misalignment between disbursement and co-financing. Disbursement tranches are paid pari passu with co-financing. If the beneficiary is unable to mobilise its own resources within the required timeframe, disbursement is halted: expected cash flow does not arrive, works slow down, and revocation clauses may potentially be triggered due to non-compliance with the implementation schedule and/or physical, procedural and financial monitoring obligations.
3. Managing savings and cost overruns. Additional costs are entirely borne by the beneficiary, while savings must be returned within 60 days of final testing. Construction accounting systems that fail to clearly distinguish between funded expenditure and expenditure borne by the applicant expose beneficiaries to the risk of excessive repayments or, worse, disputes during inspections by the Implementing Partner, the Audit Authority, ECA, OLAF or EPPO.
Why project capability is decisive
SFNIISSI is a major opportunity, but it is also a highly specialised and technically complex instrument: it integrates PNRR rules, ARERA regulation, the Public Contracts Code, the DNSH principle and climate tagging requirements.
The comparative evaluation rewards those who arrive with mature projects, robust PEFs and qualified co-financing.
This is why companies and water-sector entities are increasingly relying on specialised external consultants capable of building solid applications and overseeing the reporting phase — where revocations carry far greater consequences than exclusions.
.png){kind=small}
.png){kind=small}