State aid monitoring board chairman Paul Zahra.

The State aid monitoring board refused to give details on its decision to allow an unprecedented €88 million State guarantee to Electrogas, saying it was “secret and confidential”.

Board chairman Paul Zahra, who is also permanent secretary at the European Affairs Ministry, said: “You will appreciate that the State aid monitoring board is established by law and that every member appointed on the same board shall, by law, regard and deal with all documents and information in his possession in the performance of his duties as secret and confidential.”

Confirming the board gave the go-ahead for the guarantee, he said EU rules provided “parameters for government guarantees to be granted in line with the [community] acquis [the European Union’s body of laws]”.

Times of Malta put a number of questions on the matter, including on the dates when the board met to discuss the issue, if any external consultations were held and with whom and whether discussions were held with the European Commission.

It also asked for a copy of the board’s decision approving the guarantee and whether any similar government guarantees were ever granted to any other private entity.

It was still analysing the issue in terms of EU State aid rules

However, Mr Zahra refused to answer any of them.

Electrogas Malta Ltd is a private company entrusted to build and operate a new power station and gas-handling infrastructure at Delimara. The State guarantee was necessary for the company to obtain a loan from Bank of Valletta to finance the project.

The Sunday Times of Malta revealed that, last December, the government issued a guarantee of €88 million to cover Bank of Valletta’s exposure on a bridge loan facility of €101 million to Electrogas.

Finance Minister Edward Scicluna said that, although the government guarantee was unique, it was only temporary until the European Commission cleared a security of supply agreement entered into with Electrogas.

He said the guarantee was in line with EU State aid rules.

The European Commission told this newspaper it was “still analysing the issue in terms of EU State aid rules” and was in contact with the Maltese authorities.

Sources in Brussels said yesterday member states were normally obliged to notify State aid measures to the Commission in advance and await its approval before implementation.

The new gas power plant had to be in place by March 2015. However, last December, the government announced an 18-month delay.