[WATCH] €53 million loan for social housing project sealed

€53 million loan for social housing sealed

Malita Investments plc - an investment company with the government as the major shareholder - has sealed a €53 million loan deal with two foreign banks for the construction of a major social housing project.

The European Investment Bank and the Council of Europe Development Bank agreed to loan the funds at relatively low interest rates of between 1.6-1.7%.

Malita director Kenneth Farrugia, who also chairs FinanceMalta, told a press conference that the project will consist of 680 affordable housing units spread across 16 sites around Malta and Gozo.

He confirmed that the units would be constructed on undeveloped land falling within the development zone and which has already had planning permits for the construction of social housing issued by the Planning Authority.

People would have to specifically apply to Malita if they want to rent out one of these proposed units, and Farrugia confirmed with MaltaToday that there will be strict parameters imposed to ensure that units are only given to people who genuinely cannot afford housing at market rates. 

The signing of the deal was presided over by finance minister Edward Scicluna, social solidarity minister Michael Falzon and parliamentary secretary for housing Roderick Galdes.

Scicluna said that the deal reflects the Labour government’s plan to build infrastructure that “matches up to Malta’s high economic growth”.

Asked by MaltaToday why the government took out a loan to finance this project, Scicluna said that such a public-private partnership was the most efficient form of financing to meet the government’s spending targets and maintain a budget surplus.