A deal announced in September for Chinese equity investment in Enemalta was formally signed at the Auberge de Castille this afternoon.
It will see Shanghai Electric invest €320 million in Enemalta and getting a 33 per cent stake in the corporation. The investment means halving Enemalta's debt.
€100 million will be a capital injection into Enemalta, €150 million will be the investment to acquire the majority shareholding in the BWSC plant and €70 million is the commitment to convert the BWSC plant to gas.
Moreover, Shanghai Electric and Enemalta will form two joint venture companies: the first will invest in renewable energy projects in Europe with a target to have 300mw over the next five years; the second will be an energy service centre to service the power plants Shanghai Electric will have in the region.
The deal was first announced in Beijing on September 12 during a visit to China by Prime Minister Joseph Muscat and Energy Minister Konrad Mizzi. A memorandum of understanding had been signed by Dr Mizzi and Lu Qizhou, president of China Power Investment Corporation, the parent company of Shanghai Electric.
It had been welcomed by credit rating agencies, with Standard and Poor’s having improved Enemalta’s rating to stable from negative.
Enemalta chairman Charles Mangion signed today's agreement.
Speaking after the signing, Dr Mizzi said this was the largest ever foreign direct investment that would put Enemalta on a sure footing and improve country finances.
"This will create a new Enemalta... Enemalta will become a regional operator," he said."
He insisted Enemalta will retain sole discretion on dispatch rights: it will retain sole discretion on from where to purchase its electricity.
The minister said that the idea was to conclude the process by September to take the matter to Parliament before then.
All jobs will be safeguarded and the Petroleum Division, which is the only profitable venture of the corporation, is excluded from the agreement.
When asked whether he anticipated any problems from the EU in relation to the renewable energy project, Dr Mizzi said the company will function within the parametres of an agreement already reached between the EU and China.
Prime Minister Joseph Muscat tweeted "the future is bright for Malta".