State guarantee for power station shoots up to €360 million

The State guarantee to cover a massive bank loan for the private consortium selected to build the new gas power station has shot up to €360 million, the government revealed. The Opposition condemned the decision, which it described as “irresponsible”. In June, this newspaper had exposed the fact that the government had authorised an €88 million bank guarantee for a private loan needed by Electrogas from Bank of Valletta to finance the power station. While the government had acknowledged this was “unprecedented”, it has announced this guarantee has quadrupled. The information was put forward during a briefing session today in which journalists from different media outlets were called in separately. The guarantee for the initial €88 million from BOV has been cancelled and replaced by a guarantee of €360 million – this is 80 per cent of the financing needed. The full loan of €450 million is 20 per cent financed by the consortium’s shareholders and is being provided by four banks: BOV, KFW IPEX-Bank Gmbh, HSBC Bank plc and Société Générale. The guarantee is for 22 months. In return for the bank guarantee, ElectroGas paid government a market-oriented guarantee fee of €8.8...