The government has signed a memorandum of understanding with China in the energy sector.

The agreement will see Shanghai Electric, a state owned company, investing in Enemalta and becoming a minority shareholder.

This will lead to a cash injection into Enemalta which will, in turn, mean a substantial decrease in the Corporation's debts. The burden, which in the last twenty-five years had to be carried by the Maltese taxpayer, will be alleviated whilst preserving jobs which were put in jeopardy due to the Corporation’s debt, the government said in a statement.

The Memorandum of Understanding was signed by the Minister for Energy Konrad Mizzi and Mr Lu Qizhou, Chief Executive Officer of China Power Investment Corporation, after a meeting the Maltese Prime Minister Joseph Muscat had with the Chinese Prime Minister, Li Kenqiang, in Dalian China.

As a result of this agreement, Malta and China have a six month time frame to set up a company between them, with Enemalta's involvement, aimed at servicing other power stations that China has in the Mediterranean, the government said.

The possibility of photovoltaic solar panels being assembled in Malta is also being explored together with the creation of a joint venture for the installation of the PV solar panels both in Malta and abroad. This will also help Malta to reach the 2020 targets for the reduction in emissions.

The government said that it will remain in ultimate control of Enemalta.

Prime Minister Joseph Muscat said that he will be seeking parliament’s approval before the final deal is signed.