Shanghai Electric, which owns a third of Malta’s state energy company Enemalta, has posted losses of $1.5 billion in 2021, a downturn from $593 million in profits in 2020.
According to a Chinese state-owned media outlet, Shanghai Electric Group’s losses were attributed to unclaimed debts from its stake in a communications company, an unfinished solar energy project in Dubai, a power transmission manufacturing subsidiary’s accrued losses and reduced demand for its thermal and nuclear power generating units in 2021.
Shanghai Electric established its presence in the Maltese energy sector in November 2014 by using its foreign investments company to set up SEP (Malta) Holding Ltd, which owns 33.3% of Enemalta’s shares.
SEP (Malta) Holding Ltd was also used to set up a joint venture with Enemalta, International Renewable Energy Development Ltd, which is the investment vehicle supposedly being used to invest in onshore and offshore renewable energy projects in Malta.
Enemalta reportedly paid Shanghai Electric Power €10 million in unexplained consultancy fees from 2015 to 2019, amounting to an annual €2 million payment to the Chinese energy conglomerate.
The Shift had also reported how International Renewable Energy Development was linked with an energy storage project in Gozo that was given major prominence by Chinese state-owned media outlets but was not announced by local authorities, including Enemalta.
The joint venture between SEP (Malta) Holding Ltd and Enemalta was also linked with the Montenegro wind farm scandal in which Enemalta acquired a concession for the wind farm in Mozura only to transfer it to a consortium that was majority-owned by International Renewable Energy Development, transferring ownership to China.
As a result of this, the Mozura wind farm project, originally touted in Montenegro as an investment from an EU member state, is effectively controlled by China and is in fact paraded by the Chinese government as an example of China’s Belt and Road initiative.