Gas power project government guarantee formally withdrawn

A €360 million government guarantee on a €450 million bridge loan issued by four banks to Electrogas has been formally withdrawn, after the loan was fully repaid by the company, according to Tourism Minister Konrad Mizzi this afternoon.

Earlier this month, a security of supply agreement between the government, Enemalta, and Electrogas was signed, as Electrogas secured funding for the project to the tune of €550 million. Mizzi, who piloted the shift the gas as Energy Minister in the last legislature, said the project was now financed on a “standalone basis”.

The gas power project included the construction of a gas-fired power station and a liquefied natural gas terminal at Delimara. It was also controversial because of a floating storage unit for LNG berthed inside Marsaxlokk port.

Konrad Mizzi announced that the government had formally withdrawn a loan guarantee granted to Electrogas

Back in 2015, the government had granted a bank guarantee more than €400 million to ensure the company could start tapping bank finance in the absence of a security of supply agreement.

The agreement required clearance from the EU, which came earlier this year. However, the guarantee had to be extended just before the election since Electrogas had not yet completed the necessary paperwork with the banks after several financial institutions chose to invest with the project.