Last Wednesday’s energy agreement between the China Power Investment Corporation and the Maltese Ministry for Energy and the Conservation of Water not only  made front page headlines in the local press, as was to be expected, but also featured in Reuters, the renowned international news agency.  And with good reason too. It is not every day that one of the smallest nations in the world signs a Memorandum of Understanding with the world’s second largest economy for the latter to investment  tens of millions of euros in its energy sector.

This agreement comes in the wake of the signing of another Memorandum of Understanding less than a week ago, this time with Libya related to the supply of oil and oil products for Malta’s energy needs at favourable terms and conditions.   In return Malta will provide Libya with technical assistance in the educational sector and also training possibilities for the Libyan people.

Both these major initiatives were spearheaded by Prime Minister Joseph Muscat himself with the support of our able colleague Energy Minister Konrad Mizzi.  They both deserve all the credit for these major achievements.  In less than six months since taking office, Prime Minister Muscat has managed to negotiate successfully with the Prime Ministers of both Libya and China agreements of great importance to the Island’s economy.  He must be the envy of many Governments and Prime Ministers.

 We all remember how, before the last elections, the Nationalist Party in Government tried to ridicule the Labour Party’s energy plans in particular the promise to reduce the water and electricity rates.  They also accused the Labour Party that it had no energy policy and was taking the people for a ride. We also recall how both Joseph Muscat and Konrad Mizzi in their inimitable way, shot down the Nationalist Party’s criticism.   Time is proving both of them right. Not only Government is committed to reduce water and electricity rates during the next Budget but in a few months since coming into power, the Labour Government has done more to guarantee the security of supply of Malta’s energy needs and to ensure the survival of Enemalta than was done during twenty-five years of Nationalist administration.  

The MoUs with Libya and the Chinese Power Corporation are ground breaking.  They are a manifestation of the good relations that exist between Malta and these two countries.

Both MoUs will have a very positive effect on the Island’s economy. The agreement with Libya will contribute first towards the reduction in the purchase price of oil and oil products which will benefit industry, whose energy costs were threatening their continued presence in Malta following the exorbitant increases introduced by the Nationalist Government. Secondly it will also be to the benefit of the Maltese consumers who saw their energy bills rocketing sky high. Also very important is the fact that a reduction in energy prices will make Malta more competitive thus generating more employment opportunities, especially green jobs, which in turn will lead to economic growth.

With regard to the MoU with China, this may be considered as a life-line for the survival of Enemalta It also means that Enemalta employees, who before the last election were so much concerned about their future employment, can now put their mind at rest because their employment with the Enemalta is guaranteed.

Moreover, as a result of this understanding, millions of euros will be injected into the ailing and beleaguered corporation which is mired in huge debts amounting to over €800 million. This huge investment is expected also to help Enemalta turn a new leaf and move first towards viability and eventual profitability.  It will also send a strong signal to the Credit Rating Agencies, who have given a negative outlook to the Corporation, that Government is determined to see Enemalta changing its course and moving away from bankruptcy a point which it had reached under the Nationalist Government.

All this goes to show how wise the people were last March when they voted for a change of Government.  The previous administration had descended into a rut lacking energy, foresight and initiative to address Malta’s energy problems.  If we had not changed course the Maltese consumer would still be burdened with high water and electricity rates, would still be suffering from regular electricity cuts and would still have to make do with a power generation plant using heavy fuel oil.  Thankfully, all this will soon be behind us. 

Dr Ian Borg is the Parliamentary Secretary for EU Presidency 2017 and EU Funds