Malta Project Financing Closes

Project financing for Electrogas Malta Limited (EGM) was completed December 2017 on behalf of its equal co-owners Azerbaijan’s Socar Trading, Siemens Project Ventures, and Malta-based GEM Holdings.

Law firm Winston & Strawn announced January 15 it had advised EGM and its three owners in relation to the development and financing of the Delimara 4 LNG to power project in Malta. The project financing comprises equity plus a senior debt package of €400mn-€500mn from KfW-IPEX, Societe Generale, HSBC, Bank of Valletta, Natixis, BNP Paribas, DZ Bank, Credit Industriel et Commercial, Rivage Investment, and Arguin Infrastructure Partners.

State generator Enemalta awarded a series of long term agreements to EGM for it to develop the 210-MW gas-fired CCGT Delimara 4 power plant, LNG regas facilities, and a floating LNG storage unit, and to supply electrical energy and gas to Enemalta. Most of the facilities started up early 2017 when Socar delivered the project’s first LNG cargo.

Asked why there had been a year-long gap between project launch and financing, a spokesperson for Winston & Strawn said: “The project is multiple years old, now, and it has had multiple separate financial and commercial closings, including those for the construction of the power plant, construction of the onshore regas facilities, and the FSU arrangements which explains the year-long gap.”

The project is the first integrated LNG to power project in the world, where investors and financiers take the risk of sourcing LNG on a non-recourse basis, the law firm’s statement said. “As a first of its kind project, many of the aspects of the project had not been tried before,” its spokesperson added.

Malta has tendered for advice on a new pipe from southern Italy; however, governance in the EU island nation has come under the spotlight since the October 2017 assassination of an investigative journalist.