Issue link: https://maltatoday.uberflip.com/i/1508472
5 maltatoday | WEDNESDAY • 27 SEPTEMBER 2023 NEWS Electrogas – the previous option would have required €500 mil- lion in public funds, and a man- agement fee paid to Electrogas to run it, with Enemalta ending up paying the excise duty on the fuel anyway," he said of the ex- cise on fuel that Enemalta still pays for Electrogas as part of the deal. Enemalta decided to pay the annual €2 million in excise du- ties for Electrogas annually, so that the private consortium could stabilise its IRR and ensure the project was bankable so that it obtains banking finance. Muscat says Enemalta knew that while Electrogas could guar- antee a 7% heat rate, the actual heat rate achievable was of 4.5%, so the state utility negotiated to have 10% of the realised profits on that difference, be paid back to Enemalta. "I have no access to the real-time figures, but my calculations are $2.2 million for Enemalta, which are reaped from the savings that Electrogas makes on that heat rate differ- ence." Muscat added that even when the gas plant's machines are fixed and rendered more effi- cient, Enemalta won the right to have the benefit of those ef- ficiencies by resetting the heat conversion rates. Muscat was also asked to pre- cise his earlier claims in previous sittings as to the documentation supplied to the European Com- mission, in reaction to a state- ment from the Daphne Founda- tion. Muscat said the Maltese gov- ernment had entered into a separate agreement with one of the Electrogas consortium part- ners, Azerbaijani state company SOCAR, to retain its gas prices should the Electrogas consorti- um go bankrupt. Muscat adds that government advisors Clifford Chance had said this agreement was separate to the documentation relevant to the state aid material that the European Commission had to vet, so this deal was never shown to the European Commission. "This agreement was an 'insur- ance policy' the government un- dertook to ensure SOCAR stay on board should the rest of the consortium declare bankruptcy, so that the government could keep procuring LNG from SO- CAR." mvella@mediatoday.com.mt gives Muscat due diligence headache