Finance Minister Edward Scicluna this afternoon confirmed that the €88 million state guarantee issued by the government so that Electrogas could get a BOV bridge loan facility is “unique”.
Asked to comment on the revelations by The Sunday Times of Malta, Minister Scicluna confirmed that following long discussions, the government agreed to issue a state guarantee so that the private company could obtain the necessary finance for the gas power plant project.
He said that the guarantee was issued after the green light given by the local state aid monitoring board. However he said that discussions with Brussels were not necessary but the government started parallel discussions on the same subject with the European Commission.
Pressed to state whether this is the first time that the government issued a bank guarantee for a private company, Minister Scicluna said that this was the first time since he has been Finance Minister. However, he said that he could not speak on what happened before him.
Prof Scicluna revealed that through this government state guarantee, the private company has obtained more advantageous interest rate from the bank over its loan.
However, he added that the private company is now paying a fee to the government to cover its exposure and will have to return the difference in interest rates.
Asked whether Enemalta had inserted the possibility of this state guarantee in the original Request for Proposals issued during the competition phase of the gas power project, Prof Scicluna said that he did not know.
The Sunday Times of Malta yesterday revealed that last December the government issued an €88 million state guarantee so that Electrogas could obtain a €101 million loan to finance the new gas power project.
According to the Energy Ministry this guarantee is temporary and in line with EU rules.