Discussions are underway with several companies over a possible strategic partnership for KM Malta Airlines, with a number of non-disclosure agreements already signed, Finance Minister Clyde Caruana announced on Monday during the presentation of Budget 2027.

Caruana said the government had been assessing market interest in finding another airline that could offer KM Malta Airlines economies of scale and opportunities for additional business.

He said the necessary announcements would be made once discussions reached the required level of maturity.

Economic incentives, tourism and KM Malta Airlines

Caruana said Malta Enterprise would continue assisting businesses and industry through its various schemes, including incentives for digitalisation, automation and investment generating greater added value.

Further incentives would be offered to attract new economic niches and strengthen existing ones, with the aim of continuing to diversify Malta's economy.

In the financial services sector, work between the regulator and MFSAC would continue to improve the regulatory and administrative framework to attract new investment.

Caruana identified family offices, cryptocurrency companies, fintech and aircraft leasing as sectors in which considerable work had already been carried out and whose presence in Malta continued to grow.

Turning to tourism, the Minister said Malta was likely to exceed 4.5 million tourists this year, following increased connectivity and growth in visitor numbers throughout the year.

He said the government now needed to look beyond these figures.

In the coming months, incentives offered to airlines bringing tourists to Malta would be reviewed to place greater emphasis on attracting visitors during the shoulder and winter months.

The incentives would also focus more on destinations that attract higher-quality tourists.

The Minister also confirmed that all existing government incentive schemes would be renewed next year.

These include schemes relating to accommodation, purchasing or renovating homes, non-governmental organisations, sporting associations, electric vehicles and renewable energy.

Healthcare expansion and €75 million electricity investment

Caruana said healthcare infrastructure investment was intended to provide greater capacity, improved care and services closer to patients.

At Mater Dei Hospital, work had begun on extending the Emergency Department, doubling its capacity from 35 to 70 treatment spaces.

The project would also provide improved paediatric care facilities and spaces for healthcare professionals to work and receive training.

A new mental health unit with 135 beds and a therapeutic garden would also be built, alongside a new building for the Medical Imaging Department.

In Gozo, the government would continue implementing the master plan for Gozo General Hospital.

Plans include nine additional outpatient clinics, a minor procedures room, expanded operating theatres and a dedicated space for women's health.

Caruana said providing more care in Gozo would reduce the need for Gozitan patients to travel to Malta, while allowing services there to complement those offered at Mater Dei and reduce waiting times.

Work was also ongoing on the master plan for regenerating Karin Grech and St Luke's hospitals.

The Minister announced that, from next year, the government would also cover the cost of one person accompanying an adult patient receiving medical treatment abroad.

Currently, the government covers patients' treatment-related travel expenses and the expenses of both parents when the patient is a child.

Turning to energy, Caruana said Enemalta had completed 208 new substations and laid more than 270 kilometres of cables since 2023.

New distribution centres had also been completed in Naxxar, Siġġiewi and Msida, where a €9 million investment doubled the existing centre's capacity.

Enemalta had also launched the process to install two additional 33kV submarine electricity cables between Malta and Gozo.

Around €75 million would be invested in electricity distribution next year.

The second interconnector with Sicily would double Malta's interconnection capacity, while technical studies were underway for a third interconnector and a new 132kV connection between Malta and Gozo.

Studies were also continuing on Malta's first offshore wind farm, with a planned capacity of 300MW, while opportunities to import renewable energy from North Africa were being explored.

Caruana said investment would continue in large-scale battery storage, alongside opportunities for more domestic batteries.

The government aims for 25% of energy to come from renewable sources by 2030, with Caruana saying the figure had already reached 18.8% in 2025.

Infrastructure, education, sport and the environment

Caruana said several major infrastructure projects would continue throughout 2027, involving investment in roads, connectivity and maritime facilities.

These include the Msida Creek project, the extension of Pinto 4 and 5 and Lascaris, and shore supply projects in the southern Grand Harbour area and Lascaris, scheduled for completion by the end of 2028.

The Birżebbuġa slipway and berm project would also continue.

In education, the government would continue investing in equipment, educational facilities and human resources, while ensuring that different forms of teaching reached all students.

Caruana also said that elite athletes representing Malta in European or world championships would receive ten days of paid sports leave.

The measure would also apply to accompanying technical and medical team members, allowing them to participate without using their personal leave.

Caruana said the government would continue allocating resources to preserve Malta's cultural heritage and support the cultural sector.

Additional recurrent and capital funding would also be allocated to maintain existing recreational spaces and renovate others that had been neglected.

The government would continue providing financial and technical assistance to farmers, fishermen, livestock breeders and others involved in food production.

Caruana said their work was important not only for the country's food supply but also for maintaining the natural balance of Malta's countryside and surrounding seas.