Issue link: https://maltatoday.uberflip.com/i/908437
maltatoday WEDNESDAY 29 NOVEMBER 2017 News 4 SOCIAL EVENTS, SEASONAL PARTIES... Looking for a venue-wi-a-difference for your event? Gianpula Village offers a range of original and unique venues perfect for creating at memorable occasion. To make an enquiry or book a show round call (356) 9974 8923 or email sales@gianpulavillage.com www.gianpulavillage.com CORPORATE EVENTS CLUB HOUSE • VAULT • PENTHOUSE MATTHEW VELLA DEMOCRATIC Party MP Mar- lene Farrugia has asked Prime Minister Joseph Muscat to de- liver a ministerial statement on reports about a multi-million euro State guarantee for a loan to Electrogas. The Times has reported that the finance ministry's top civil servant in September raised concerns about a "serious" de- fault by Electrogas, the compa- ny supplying Malta with LNG, under the terms of a €450 mil- lion loan agreement which is covered by a multimillion-euro State guarantee. Permanent secretary Alfred Camilleri was notified by banks in early September of a default in the agreement by the consor- tium behind the new gas-fired power station in Marsaxlokk. Camilleri told those involved that the default under the loan agreement was a very "serious and urgent matter" requiring immediate attention. Farrugia has now written to Muscat calling on him to make a ministerial statement. "Spec- ulation on such a large finan- cial guarantee, granted behind Parliament's and the people's backs, to a private company is surely no credit to the country's financial credibility and secu- rity." But the government yesterday said the bridge loan agreement between ElectroGas and the original consortium of finan- cial institutions, provided for a timeline within which "tech- nically complex and volumi- nous" documentation was to be provided to the institutions. "As the project progressed, more financial institutions were interested in financ- ing the project, and the con- sortium of financial institu- tions increased substantially in number. This clearly led to more parties being involved in the discussions... requiring them to familiarise themselves with the details and documen- tation relating to the project," the government said in a state- ment. The delay led to an ex- tension of the maturity date for the bridge loan refinancing. "It is not correct that the banks or the government turned down the waiver of the default. Given that the government is guaran- teeing part of the bridge loan, it has built-in protection mecha- nisms whereby the lenders cannot simply extend the ma- turity date for the bridge loan refinancing without govern- ment approval. In this context, the circumstances justified an extension to the maturity date for the bridge loan refinancing, considering the developments and additional financial insti- tutions which were involved." The Times said Electrogas – a three-way partnership be- tween Maltese investors GEM (Gasan-Tumas), Azerbaijan's State-owned energy company Socar and German company Siemens – had failed to submit the documentation showing they secured long-term financ- ing for the project by the stipu- lated deadline. In September, the govern- ment agreed to once again ex- tend what it had once termed a "temporary" €360 million State guarantee on the loan, in order to give Electrogas more time to secure financing. This action led to a waiver being granted, allowing the banks to continue extending credit to Electrogas until the end of this month. The guarantee is intended to temporarily replace the se- curity of supply agreement. Following clearance by the European Commission earlier this year, the government now said the finance documents for the refinancing of the bridge loan are expected to be execut- ed by the end of this month. The security of supply agree- ment will be executed after the execution of the finance docu- ments and the release of the guarantee. The government said Elec- trogas had given adequate se- curity including the share call option agreement, which will be retained until the guaran- tee is released, and that guar- antee was within EU state aid rules. "The Commission services were also informed by the Maltese authorities on the parameters with which the government guarantee was placed and no state aid con- cerns were raised." In a tweet, former PN leader Simon Busuttil said "no serious financial institution can grant long-term financing to this du- bious Electrogas project when it knows that it is the subject of an FIAU investigation involv- ing Keith Schembri and Kon- rad Mizzi." Former energy minister Kon- rad Mizzi had said the tem- porary guarantee would be withdrawn after the European Commission announced that Malta's 200MW LNG power plant did not fall foul of EU state-aid rules, enabling it to obtain a security of supply agreement. Mizzi and the Prime Min- ister's chief-of-staff, Keith Schembri, were being inves- tigated in connection to the LNG project, according to leaked excerpts of an unfin- ished FIAU investigation. The leaked notes surmised that a Dubai company set up by the owners of the LNG tanker that supplies gas to Enemalta, could have been planned to funnel payments to Schembri's and Mizzi's offshore compa- nies in Panama. Electrogas to finalise refinancing of bridge loan by end of year