Issue link: https://maltatoday.uberflip.com/i/1517228
15 NEWS maltatoday | SUNDAY • 10 MARCH 2024 the green investment gap schemes, the number of jobs safe- guarded and investment generat- ed on the ground are important indicators; but I would also like to start seeing data about carbon emissions avoided, and how green these businesses are. The financial results for last year, currently being finalised, demon- strate how the MDB manages to combine its public mission with prudent management, leading to good financial performance. But in the longer term, we do not be- lieve this is enough. We will focus more on green initiatives in 2024, because that is where our efforts really need to be. How different will your green initiatives be from all the others out there? The MDB has the experience and knowledge to develop and implement financial instru- ments effectively. It is adept at mobilising resources efficient- ly through leverage, achieving more with less. This is accom- plished through strategic part- nerships with other entities, blending their grant-based re- sources with MDB's guarantees, thereby expanding the reach and impact of resources through intermediation via commer- cial banks. We've achieved this with the popular Further Stud- ies Made Affordable scheme and the COVID-19 Guarantee Scheme. We firmly believe that this approach is the correct path forward to bolster the green transition and unlocking private investment in the process. The green investment gap – how much the world needs to in- vest in green technology to start to fight adverse climate change – is massive. To do Malta's part in closing that gap is no small endeavour either. And to make matters worse, studies across the world have shown that pub- lic investment alone cannot suc- ceed – the private sector must be crowded in. This is why the MDB has a critical role. We are well positioned and equipped to create the leverage, crowd-in commercial banks, provide the guarantees, and design the fi- nancial instruments the country needs to fund the green transi- tion. What green initiatives is the MDB working on? We are holding talks with Mal- ta Enterprise on a blended in- strument which will target green mobility and on other initiatives targeting investments in the blue economy. We are also in close discussions with the Managing Authority – the entity responsi- ble to manage EU Funds in Mal- ta – to facilitate a new financial instrument to support energy efficient initiatives. The MDB is also an Imple- menting Partner (IP) under Connecting Europe Facility's Alternative Fuels Infrastructure Facility (AFIF) which is a blend- ed EU Financial Instrument. As an IP, the MDB will be support- ing investments in charging in- frastructure for public buses. We also see a huge potential to involve the MDB in large-scale investments, especially those with a long gestation period. The bank would step in here, to make these projects bankable. The po- tential, particularly in renewable investments, is huge. The gov- ernment commissioned studies to identify the ideal zones for the development of offshore renew- able energy in Malta with the objective to achieve a better mix of energy sources. We would be facilitating financing conditions, without competing directly with commercial banks, and make such projects more bankable. The idea is to assure financial viability for large-scale green projects. On the funding side, in No- vember last year we obtained €30 million in financing as an EIB Climate Loan and following the European Investment Fund's on-site visit as part of the due diligence process, the MDB was allocated €15 million under the Sustainability Invest EU Guar- antee which will be mobilised mainly through the SME Guar- antee Scheme and Guaranteed Co-Lending Scheme. What does the transformation you hinted at consist of? Businesses look at sustainable development as a challenge. It is perceived as something that is costly, or that involves bureau- cracy. We believe that if used strategically sustainability is an opportunity for business, and not a barrier. We ourselves are beginning to change the way we operate. We must start to make our financing and investment decisions differently. We want to include in our credit analysis not only financial and economic data, but also the impact on en- vironmental, social, and govern- ance issues that our loans and guarantees lead to. This is al- ready part of our newly designed ESG policy. To transform our business model to include these princi- ples, it is also necessary to de- velop new methodologies and internal procedures. The bank is very strong in the social and gov- ernance areas, and we are now further developing our environ- mental engagement. In this respect, we are obtain- ing a wealth of know-how from advisory support provided to us by the European Investment Bank through the Green Gate- way project. For us to undertake a transformative journey we must integrate and co-ordinate diverse elements to become a more proactive participant in the green transition. Paul V. Azzopardi Businesses look at sustainable development as a challenge. It is perceived as something that is costly, or that involves bureaucracy. We believe that if used strategically sustainability is an opportunity for business, and not a barrier. We ourselves are beginning to change the way we operate. We must start to make our financing and investment decisions differently.