During his weekly video blog, the Minister for Finance Prof. Edward Scicluna discusses the recently-signed historic deal between the state-owned Corporation Enemalta and Chinese company Shangai Electric.
Minister Scicluna underlines that the deal will not only have the effect of restoring the ailing energy corporation to health, but will also have a considerable impact on the country’s finances, as the corporation owes considerable sums to the Government in arrears.
The Minister recalls that as recently as November 2012, the Opposition was called upon by the Government to support its plan to restructure the Corporation’s debt and save it from complete collapse through the approval in parliament of a special purpose vehicle.
Prof. Scicluna also explains that for 25 years, the previous administration made no provisions for the payment of that debt, and that, to this day, it is only the interest that has been paid off, and not the capital itself.
Prof. Scicluna explains that this accumulated debt led to the energy corporation being downgraded by various Rating Agencies, and also declared ‘loss making’, and ‘grossly undercapitalized’ by PriceWaterhouseCoopers (PWC).
– Friday, 23rd January, 2015