Malta Development Bank to act as catalyst for alternative finance, minister tells investment conference

The Malta Development Bank will operate under the statergic  objective of addressing market failures by offering financing facilities to support productive and viable operations where the market is unable or unwilling to accomodate such activites, according to Finance minister Edward Scicluna.

Addressing a conference with the theme “Investment and Investment Finance – the case of Malta”, Scicluna said the the bank’s operations would be focusing on the provision of facilities to SMEs and infrastrucutre projects that conribute to national or regional development.

The conference was organised jointly by the European Investent Bank and the Central Bank of Malta and was attended by “senior officials from leading public and private institutions, embassies and commercial companies,” the ministry said in a statement.

It quoted the minister as saying that rather than being driven by purely commercial considerations and profit maximisation, the MDB “would be primarily committed to supporting socio-economic objectives in the public interest”.

“It will thus be complementing and supplementing the operations of market players in the financial system, rather than offering any form of competition,” said Scicluna.

“In effect, it will be operating as a lender of last resort on a non-competitive basis as well as financing those projects, such as large infrastructure projects, which, because of their long gestation period and risk profile, will inhibit commercial banks to finance such investment.”

Moreover, the minister said the bank “could also act as a catalyst to encourage credit institutions to participate in syndicated loans for local inftastructure development, provide guarantees, or co-finance such projects with credit institutions or directly under a Public-Private Partnership initiative”.

 “Malta’s Development Bank will also seek opportunities to increase the utilisation of the European Fund for Strategic Investments and enhance the financing of infrastructure by blending its resources with other EU funding instruments,” concluded Minister Scicluna.