Electrogas in ‘serious’ default of €450 million loan deal

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Updated at 11.15am with PD letter A top official at the Finance Ministry in September raised concerns about a “serious” default by Electrogas under the terms of a €450 million loan agreement, which is covered by a multimillion-euro State guarantee. The Finance Ministry’s permanent secretary Alfred Camilleri was notified by banks in early September of a default in the agreement by the consortium behind the new gas-fired power station in Marsaxlokk. Mr Camilleri told those involved that the default under the loan agreement was a very “serious and urgent matter” requiring immediate attention. Sources said Electrogas were found to be in default of the agreement, as they had failed to submit the necessary documentation showing they secured long-term financing for the project by the stipulated deadline. The Electrogas consortium is a three-way partnership between local investors GEM, Azerbaijan’s State-owned energy company Socar and German company Siemens. The banks informed the Finance Ministry that Electrogas had requested a waiver of the default, which they turned down. After a flurry of meetings held in September, the government agreed to once again extend what it had once termed...