Government’s refusal to say how it is guaranteeing Electrogas Malta’s debts to the tune of €88m

The Opposition held a press conference about it this morning. This really is a shocker, but because lots of people can’t differentiate between a loan and a guarantee for a loan, the full extent of it isn’t coming across.

Put plainly: Electrogas Malta Ltd, which is made up entirely of private shareholders bar the State Oil Company of Azerbaijan, and which includes Maltese shareholders the Tumas Group, Gasan, and others less well known, has been loaned the sum of €101 million by the Bank of Valletta, whose chairman is Labour-government-appointee John Cassar White.

The shareholders of Electrogas Malta Ltd have been unable or unwilling to put up collateral for the loan, so to save its own neck because it’s got to have that power station or end up an electoral laughing-stock with demands for the prime minister’s resignation, the government has stood as guarantor to the loan itself.

It is not guaranteeing all of the loan, but ‘just’ €88 million of it.

In plain terms, what this means is that if Electrogas Malta Ltd fails to pay its €101 million debt to the Bank of Valletta, in whole or in part, the bank will turn to the government for the money and the government will have to pay the debt instead, up to €88 million.