A secretive deal by the government to buy the new gas-fired power plant is set to remain under wraps as the Finance Ministry resists publishing details of the contract after a Freedom of Information (FOI) request was filed by this newspaper.

The share call option agreement signed in July 2015 gives the government the option to buy 100 per cent of the shares in the project from Electrogas should the European Commission reject the security of supply agreement.

The deal only came to light after a short reference was made to it in Electrogas’ annual accounts.

This paper’s FOI request was rejected by the Finance Ministry on the basis that the deal contains “commercial and financially-sensitive information” which is covered by exemptions in the law.

A short reference to it in Electrogas’ annual accounts

Questions on why the buyout agreement was never made public by the government and the value placed on the Electrogas shares have been unanswered for over two months despite multiple reminders.

Apart from selecting Electrogas to build the new plant, the government pledged to enter into a power purchase agreement with the private group, committing Enemalta to purchase all the energy produced by the new plant, at fixed rates, for 18 years.

The security of supply agreement stipulates that the government will step in and buy the electricity if Enemalta reneges on the power purchase agreement. Apart from the secret buyout option, the government has also helped Electrogas finance the project through the provision of a €360 million loan guarantee, an amount which shot up from an initial guarantee of €88 million.

An FOI request and subsequent appeal by this newspaper asking for more details on the loan guarantee were rejected, on the basis that providing these details “could have a substantial adverse effect on the ability of the government to manage the Maltese economy”.

The delivery of the new power station was the key promise in Labour Party’s March 2013 election campaign.

The power station was supposed to be completed by March 2015, but almost two years later it is still not operational.

jacob.borg@timesofmalta.com

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