Government securing almost €300m in loans to Enemalta
Matthew Vella The government has had to guarantee more bank loans for the beleaguered state energy company Enemalta in 2008, with €295 million in loans now secured by the state.
According to the Auditor General’s report for 2008, Enemalta took out €75 million more in loans over 2007.
These include a €30 million “short-term overdraft facility”, which is an indication that Enemalta was experiencing cash problems in tending to its operations during the year.
The rest are letters of guarantee to secure loans made to Enemalta to finance its capital expenditure. If Enemalta fails to pay back these loans, the government will be required to foot the bill.
The Enemalta Corporation’s financial estimates recently tabled in parliament, have already revealed a shocking picture of its serious debt. Enemalta registered a €16.5 million loss in 2007, and at end-2008 is estimated to have lost another €77 million. This year it is expected to register a €45 million loss.
As the Auditor’s report reveals, Enemalta is now heavily financed by the banks, as serial losses have now dropped the value of the corporation.
Enemalta is mainly funded – 70% of its assets – by banks in loans and overdrafts, while another 19% through creditors for supplies.
The corporation also wants to invest €627 million over the coming years to improve the energy infrastructure, of which only €12 million has been spent so far, with €107 million to be spent this year.
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