Repercussions of use of public money for bank guarantee offered by government to private consortium

14.8.2015

Question for written answer P-012087-15
to the Commission
Rule 130
David Casa (PPE)

Following an electoral promise by the incumbent government of Malta to build a new gas power plant in Malta, the Electrogas consortium has been selected as the preferred bidder for this project.

The government has just released the information that, after placing a EUR 88 million burden on the citizens of Malta without giving any information on this agreement, it has now authorised a EUR 360 million state bank guarantee that cancels the EUR 88 million in order to help the power plant builder, Electrogas, to obtain a bridge loan from Bank of Valletta. This was needed in order to cover an extensive bank loan given to the private consortium. Following this spike in funds, the bank guarantee will now constitute 80% of the financing needed for this project. The government has no links with this company as it is a completely private entity.

The government is going beyond its electoral mandate and misusing public funds by putting this financial burden on the electorate by financing this project using taxpayers' money, when the promise was that this plant would be built through private investment.

Will the Commission investigate whether such practice is in line with EU State aid and competition rules?