Enemalta refinancing plan to be presented soon to parliament – Prime Minister

Prime Minister Lawrence Gonzi has reiterated his commitment to present a refinancing plan for Enemalta, after Standards & Poor's downgraded the beleaguered corporation when government did not produce a debt-repayment programme in 2011.

Gonzi said the refinancing plan is expected to be presented to parliament soon, according to an interview he gave to the Chamber of Commerce's official magazine.

Gonzi told the Commercial Courier the plan for Enemalta's €600 million debts will provide a long-term framework for their repayment.

"This repayment programme will provide clarity and transparency to the banks and the regulator. It will provide comfort to rating agencies and financial institutions as to the feasibility and financial viability of Enemalta," Gonzi said.

The prime minister said lengthy negotiations on the plan with the banks have already taken place.

A plan for the creation of a special purpose vehicle that will take on Enemalta's debts and spread them over period of 25 years, is also in the offing.

A refinancing plan was expected to be prepared for 2011, according to S&P, which lowered its rating for Enemalta because of the ongoing delays in refinancing outstanding debt.

On his part, Opposition leader Joseph Muscat told the same publication Labour was committed a to a debt-reduction programme. "Labour will not be playing around. Our intention is to make the running of Enemalta and the cost of production more efficient and less expensive."

Muscat said a new Labour government was interested in working with Norwegian company Sargas, which has proposed cheaper electricity bills if it builds a power plant that works on a mix of coal and biomass. "Sargas's proposals, which are just one example, lay on Gonzi's desk for years before Labour spoke about them, forcing the government to look into these proposals. It can be done, and government knows this."

The controversy surrounding Sargas is that Labour accuses the government of deliberately ignoring the proposal when it was made back in 2010 when European Commissioner John Dalli put Sargas in touch with the administration.

"The truth is that the PL has a number of similar proposals, which set out how much money could be saved in this sector, and it will be publishing them at the opportune time," Muscat said.

Government has already decided to absorb costs paid by Enemalta over schemes such as the feed-in tariffs and the eco-reduction, which both cost the corporation €25 million per year.