Enemalta debt ‘falls’ to €471 million

Debt at Enemalta guaranteed by the Maltese taxpayer has fallen by €150 million, after its total dues had climbed to €621 million back in 2011.

The detail emerges in the Auditor General's annual report for 2012.

The state energy corporation is wracked with debt, taken out over the years to finance the construction of the Delimara power station extension and also its interconnector to Sicily.

The reason for this apparent trim in Enemalta's government-guaranteed debt is that €243 million in debt has now been replaced by another guarantee in the name of Vault Finance Ltd. The letter of guarantee was issued to secure a €318 million loan facility and replace the existing Enemalta guarantees.

In total, government's total letters of comforts and bank guarantees translate into an accumulated €1.24 billion in debt should it have to make good for these debts.

Vault Finance Ltd. is the name of the special purpose vehicle created by Enemalta to repay the energy corporation's huge debts. The company was incorporated in December 2012, and its shareholders are Enemalta and the Vault Foundation.

By setting up a special purpose vehicle, administered by a foundation, property belonging to Enemalta corporation will be transferred to the foundation and leased back to the corporation.

Discussions on restructuring started in 2009 because the corporation had to double its borrowing requirements to embark on the Delimara power station extension and the Malta-Sicily interconnector project. Enemalta's financial position had to be ensured so that it could acquire confidence from international financial agencies.

Up to 30% of the state energy corporation will now be sold to a Chinese-government owned investment and energy company, further reducing the corporation's debt to some €200 million.