Claims that the European Investment Bank had refused to finance the consortium building the new gas-fired power plant were yesterday denied by the Energy Ministry.
The statement was released in reaction to a story published in The Sunday Times of Malta which quoted EIB sources saying that the request had been turned down because the project had not satisfied the bank’s rigorous due diligence tests.
In 2013, Electrogas, a private consortium made up of four shareholders, had been chosen by the government to build a new power plant which was supposed to be in operation by last March. However, the project fell behind and is now expected to be completed in June next year.
The Energy Ministry did not reply to the newspaper’s questions before publication of the story. Yesterday morning, it issued a denial.
It described the claims as a total fabrication of facts. State energy company Enemalta had conducted preliminary engagement with the EIB during the early stages of the project, it said.
The bank had expressed strong interest in the project but this avenue was not pursued following the government’s decision to pursue private financing
The bank had expressed strong interest in the project but this avenue was not pursued following the government’s decision to pursue private financing.
No problems with due diligence had been encountered with the EIB, the ministry stressed. It was also pointed out that the project was nevertheless subjected to rigorous scrutiny by KFW, HSBC, Societe General and Bank of Valletta, when the consortium sought to raise the required capital through commercial loans. However, this financing was only secured against a €360 million State guarantee.
The ministry said the project was moving forward and it would contribute to lower utility bills and lower emissions through the use of gas rather than heavy fuel oil in the generation of electricity.
Meanwhile, the Nationalist Party yesterday said that the government had once again been caught lying over the new power station and urged it to publish all contracts related to this project.