The new date for when electricity will start to be delivered from the new gas-fired plant at Delimara is June 2016, Energy Minister Konrad Mizzi announced today.
The power station was supposed to be completed by March 2015, but was delayed due to talks with Shanghai Electric, the company that will be taking over the BWSC plant.
The government had a choice Dr Mizzi said, either to go ahead with the original project and complete the new gas plant in 18 months, or to ensure that the Electrogas consortium and Shanghai Electric Power investments were aligned.
The formal closure of the Shanghai Electric investment is being finalised, and will formally be signed in the coming weeks. This will be the largest foreign investment every seen, he said.
This confirms a story that was published on this portal yesterday and in The Malta Independent daily newspaper today that a deal had been concluded and that it was to be announced by Minister Mizzi in Parliament.
“This is what we did, we chose to marry these two investments. The BWSC conversion will be financed by Shanghai Electric. The plant will also have the possibility to function on gas oil.”
The agreement will be presented and discussed in Parliament, he said.
The government will retain full control of Enemalta.
Shanghai Electric will have a 33% stake in Enemalta but the government would retain control.
The building of the new gas power station had started with levelling works and equipment has been ordered including LNG conversion equipment.
Jetty works will start in January.
Works on the new plant's turbines are currently being carried out by Siemens.
“The Labour government inherited an energy sector in disarray. We had the highest electricity tariffs in Europe, and almost a one billion in debt on Enemalta.
“This was putting pressure on Malta’s credit rating, and the impact on the government’s coffers was massive.”
“There was a real risk that the government could have gone under with Enemalta. Enemalta’s outlook is now stable. More specifically, Enemalta is in a position to pay taxes back to the government, allowing for more investment in education and health.
“The interconnector will be ready in the coming weeks, and the BWSC plant will be converted from heavy fuel oil to gas.
“This turnaround was possible because we made sage choices. The country was presented with a strategic opportunity to enter into a €320 million investment agreement with Shanghai Electric.”
Enemalta, for the first time has paid back €130 million in excise duty.
Families have been enjoying a 25% decrease in energy tariffs, translating into an injection of €30 million, driving economic growth.
He reminded that from March 2015, energy tariffs for businesses will also come down by 25%, which will inject €50 million into the economy.
These reductions will not impact government finances or require more taxes, Dr Mizzi said.
“This government worked on a seven-year plan together with Shanghai Electric Power. Generation costs will come down, making Enemalta more profitable,” he said.
When coming into government, the major part of works on the interconnector were not done, he said.
The original plan by the PN government required many modifications. As an example, the cable originally passed through an area where the Italian government was digging for oil.
The Minister mentioned the dangers of these cables that are around 100 km long. He said that if damaged, it could have caused great problems for Malta as repairing these cables is no easy task. “This is why we chose to diversify the energy sector”.
He mentioned the interconnector will be finished soon, and in a few months the first tests will begin.
Regarding the purchase of energy through the interconnector, he said this would be more expensive than the energy that will be generated in Malta.