Malta: EUR 54m unlocked by Maltese Government with EU Fund for over 2,000 projects in Energy Efficiency and Renewable Energy

The EU institutions strongly support green projects in Malta. The European Investment Fund (EIF, part of the EIB Group) has reached an agreement with APS Bank and another one with Bank of Valletta (BoV) to deploy EUR 54m of loans and EUR 2.82m of interest rate subsidy aiming at financing projects in the sector of renewable energy.

The Energy Efficiency and Renewable Energy guarantee agreements were signed today by EIF Chief Executive Alain Godard, and respectively Marcel Cassar for APS Bank and Albert Frendo for Bank of Valletta with the presence of both Stefan Zrinzo Azzopardi, Parliamentary Secretary for European Funds, within the Office of the Prime Minister, and Paul Zahra, Permanent Secretary for European Funds, within the Office of the Prime Minister.

This operation follows the signature of a Funding Agreement between the Republic of Malta and EIF early in 2020 that has entrusted EUR 15m of EU structural and investment funds (ESIF). Thereafter, EIF immediately launched a call for expression of interest to deploy a guarantee instrument combined with an interest rate subsidy program for Energy Efficiency and Renewable Energy investments made by households and enterprises in Malta.

This new funding will allow banks to unlock EUR 54m of financing to Energy Efficiency and Renewable Energy projects and is expected to reach between 2,000 and 3,000 projects across the country.

In the field of environmental protection, the EIB Group has adopted a new institutional mission as the EU’s climate bank, undertaking to support green projects worth €1 000 billion over the 2020-2030 period.

EIB Advisory Services will provide the two financial intermediaries with an advisory package consisting of online tools and bilateral support services, focusing on market development activities and on development, assessment and reporting of the eligible projects.

Commenting on the signature of the guarantee agreement, EIF Chief Executive Alain Godard said: “I am delighted with the today’s signature as this is the first financial instrument using structural funds that targets projects related to energy efficiency and renewable energy. This instrument is a clear novelty for the market as it combines a guarantee with an interest rate subsidy programme while banks will be supported by a consultant selected by EIB Advisory Services to measure the impact of investments generated by the portfolio. It is very encouraging that the Maltese Managing Authority decided to pioneer this financial instrument with the EIF and I look forward to continued cooperation in the future.”

“We are delighted to participate in this pilot European financial instrument, more so when this is a first for Europe”, declared Albert Frendo, BOV’s Chief Credit Officer, “Once again Bank of Valletta is leading the introduction of accessible and affordable green financing to the market. This will effectively translate into more households and businesses affording to invest in sustainable products and systems that will have a positive impact on our environment.  This is very much in line with our ESG commitment to contribute towards cleaner energy through the Bank’s suite of banking, investments and financing products.”

Mr Marcel Cassar, Chief Executive Officer of APS Bank, said: “APS Bank is proud to be once again co-operating with the European Investment Fund in the area of sustainable financing, which lies at the heart of our community banking mission. Through this instrument we shall be bringing a range of additional benefits to households and business firms, such as longer repayment terms, subsidised interest, reduced security requirements and advisory services. In a world dominated by a pandemic that has taken us all by surprise, increasing vulnerability to hundreds of millions, the need to understand what is happening to our planet and society has never been greater. This is our opportunity as a bank to make a difference by serving as a key intermediary with our long-standing partner the EIF and other members in the EIB Group.”

Parliamentary Secretary for European Funds, within Office of the Prime Minister, Stefan Zrinzo Azzopardi, said: “Malta has the lowest emissions per capita in the European Union but that also means that we have limited emissions reduction potential. Nonetheless this will not limit the Government from moving ahead to reach its objectives, ensuring the provision of all the necessary incentives to enable a collective effort to continue reduce emissions. This initiative is proof of this joint effort, with the government, business partners, individuals and banks all pooling in to help Malta become more  environmentally sustainable. It is through these initiatives that we can reach the ambitious goal set by our Prime Minister, Robert Abela, to achieve carbon neutrality by 2050.”