China power firm Shanghai Electric to take 25pc in Malta firm Enemalta

PUBLISHED : Wednesday, 16 October, 2013, 12:00am
UPDATED : Wednesday, 16 October, 2013, 3:05am

Shanghai Electric Power planned to invest about €200 million (HK$2.1 billion) in Malta's state-owned energy provider Enemalta, the island nation's finance minister, Edward Scicluna, said.

The Chinese company's acquisition of a 25 per cent stake in Enemalta was "good news" that would help to offset about €800 million in debt that the Maltese government had guaranteed for the utility, Scicluna (pictured) said. The sale would help the government meet its deficit-reduction target, he said.

The companies were negotiating the sale price and a deal was expected to be completed by February, Scicluna said in Luxembourg on Monday before a meeting of euro-area finance ministers.

"It's a new broom and we are sweeping well," Scicluna said.

The government of Maltese Prime Minister Joseph Muscat, elected in March, "means business" and was focused on achieving credibility by delivering on its promises to Europe and beyond, he said.

Scicluna said Siemens Project Ventures would lead a consortium to build a natural gas-fuelled power station in Malta, reducing the island's dependence on heavy fuel oil.

The project, announced at the weekend, will be run by ElectroGas Malta, a newly created joint venture.

Siemens Project Ventures will hold a 20 per cent share of the project. The other investors are Socar Trading with 20 per cent, Gasol with 30 per cent and GEM Holdings, a group of Maltese investors, also with 30 per cent.

Scicluna said the government would bring its budget deficit below the European Union's 3 per cent of gross domestic product limit this year, two years before a deadline set by the European Commission.

He said the Finance Ministry was considering raising indirect taxes. "The government's policy to shift taxation from direct to indirect will be sustained over the medium term," he said.