PN wants power station audit extended to include new state guarantee

The Nationalist Party has called on the Auditor General to investigate a €360 million state guarantee on a €450 million bridge loan to ElectroGas that the consortium required to construct a LNG power station at Delimara.

Upon the PN’s request, the National Audit Office had already started investigating the contracts signed between the government and ElectroGas. Back then, the government had come under fire for acting as guarantor for ElectroGas on a €88 million bank loan to the consortium from Bank of Valletta.

However, Opposition MPs Tonio Fenech, Mario de Marco, Claudio Grech and Marthese Portelli have now formally asked the NAO to extend his investigation to include the new €360 million guarantee that the government had announced last week.

The government will be guaranteeing 80% of the 22-month bridge loan, while the consortium will guarantee 20% (€90 million) of the loan. In return for the bank guarantee, ElectroGas Malta paid government a market-oriented guarantee fee of €8.8 million.

“The Auditor General recently wrote to us to confirm that his office has started investigating,” the PN said in a statement. “We are particularly concerned about the unique and unprecedented state guarantee that has allowed a private consortium to loan money to construct a power station.” 

Energy minister Konrad Mizzi has played down fears over the guarantee, explaining that it is simply a temporary solution until the European Commission issues clearance over the Security of Supply Agreement it had entered into with ElectroGas.