The government today signed a €320 million investment deal with the Chinese energy company Shanghai Electric Power (SEP). 

Through the agreement, Shanghai Electric will be taking a 33% stake in Enemalta for which it will pay €100 million and purchase a 90% shareholding in the BWSC plant for €150 million. The Chinese company will also front the conversion cost of €70 million to shift the BWSC plant from working on heavy fuel oil to gas. 

The deal will see Enemalta's debts halved. 

SEP will guarantee 33% of the remaining debt and the government 66%. 

Prime Minister Joseph Muscat today presided over the signing ceremony between the Energy Minister and Shanghai Electric Power for the "strategic investment" in Enemalta.

Dr Muscat called it an important day, as the energy sector is being placed on a sound footing, strengthening the economy, creating new opportunities and solidifying links with the globalised world.

He called it a living example of how in a short span of time, a problem was turned into an opportunity. Malta is going to start offering services to the rest of the region, he said. He thanked Shanghai Electric Power for believing in the country, saying that the negotiations leading up to the deal were tough but honest. Hearing graduates celebrating outside Castille, Dr Muscat said “we join them in their celebrations.”

Shanghai Electric Power Chairman Yudan Wang said the agreement was reached after “lots of hard work” since the start of a cooperative relationship between the company and the Maltese government in September 2013.

“The project has drawn high-level attention from the Maltese and Chinese governments...The Malta project is not only the first step into Europe but also consistent with long-term investment strategy... The signing ceremony is not the end but rather a fresh start of much closer relationships in the future, committed to providing clean and sustainable energy,” the Chairman said, through a translator.

Energy Minister Konrad Mizzi said he is honoured and proud about this investment, calling it the largest one every seen in Malta. The investment will open up huge opportunities for Enemalta he said, as well as eliminating the use of Heavy Fuel Oil.

He said the two partners will be investing abroad, and the investment will not just be monetary but in terms of knowledge transfers for Enemalta workers. 

€250 million to be invested this year, €70 million next year

In a press conference after the signing, Dr Mizzi said SEP will be investing €250 million this year and €70 million next year.  Dr Mizzi said there will be no contractual obligation to buy a minimum amount of energy from the BWSC plant.  A committee will be set up in order to determine where best to procure Enemalta's energy supplies from. 

He reassured Enemalta employees that they will continue to be employed by the government and trade union issues will be handled by the Maltese.

A number of companies will be set up as a result of the deal. 

International Renewable Energy Development will embark on a number of projects in Europe, and aims to provide 300MW in clean energy to the continent. A pilot project will also take place in Malta. SEP will own 70% of this company and Enemalta 30%.

International Development Limited will provide maintenance services to all SEP plants in Europe. It will also specialise in plant design and serve as a research platform.

Deal to be discussed in Parliament on Wednesday

Dr Mizzi reiterated the government pledge to publish the investment agreement. He said the deal will be debated in Parliament on Wednesday. He said the power-purchase agreement is "commercially sensitive" and further discussion need to take place between all the partners before it can potentially be published. 

The Electrogas consortium, which will be building a new gas-fired plant, is fully on board and comfortable with the agreement, he said.