The government should fully explain the granting of an €88 million State guarantee on a bank loan to a private company, the Malta Chamber of Commerce, Enterprise and Industry has said.

The Chamber urged the government to give “a full presentation of the relevant facts in the appropriate forums, to ensure better transparency”.

The guarantee concerns a Bank of Valletta loan to energy company Electrogas which is building the new gas power station at Delimara.

Insisting that the power station guarantee is not a straightforward matter, the Chamber said that “further delay in presenting the full details will continue to raise unnecessary yet understandable doubts within the country”.

However, EU Commissioner Karmenu Vella did not wish to enter the fray.

Asked by Times of Malta to explain the Commission’s position on the €88 million State guarantee, Mr Vella said: “This is not something that I can comment about as it does not fall within my portfolio.”

The Sunday Times of Malta revealed that last December the government approved an unprecedented €88 million State guarantee so that Bank of Valletta could issue a €101 million loan to Electrogas.

Although the government admitted this was a unique guarantee that benefited a private company, it justified the move as a temporary measure until the European Commission green-lighted a security of supply agreement connected with the gas power project. So far, the government has refused to publish the guarantee letter.

The European Commission said that it had not cleared the guarantee or the security of supply agreement and was still assessing whether any form of State aid was involved in the contract between the government and Electrogas.

Electrogas has denied having difficulty raising the necessary capital for the project and insisted it was well-funded.