Malta’s first ‘Green Bond’ to finance project already completed with EU funds in 2021

The plant is up and running so why does it need new funding?


Aqra dan l-artiklu bil-Malti

Malta’s ‘first green bond’ has been dubbed by experts as “no more than an exercise in greenwashing” for the benefit of Environment Minister Miriam Dalli, while concerns have also been raised over discrepancies in funds’ disbursement.

The Green Bond was issued for €25 million with a term of 10 years and an interest rate of 4.25% by the Water Services Corporation (WSC) in July 2023 to finance several green projects around the country.

When the bond was issued onto the stock market, the government stated that “proceeds from the Green Bonds will be used to finance several green projects, such as Gozo’s cutting-edge reverse osmosis plant in Ħondoq.”

However, the Ħondoq plant was finished and inaugurated by Prime Minister Robert Abela in November 2021, almost two years before the bond was issued. It was co-financed with money from the European Union.

Contrary to what was stated in the bond’s prospectus, in November 2021, the WSC issued a statement declaring the new Ħondoq plant open, leaving no doubt that it was up and running before the bond was issued.

Instead, according to the public statement, “The first Reverse Osmosis plant in Gozo has been officially inaugurated with an investment of €11 million, co-financed by European funds. Thus, Gozitans will be enjoying independent production of high-quality water that reaches their homes and businesses”.

The Shift asked CEO of WSC Karl Cilia, who had previously called the bond a “landmark initiative”, whether this was a mistake.

“As you rightly note, the Ħondoq project was co-financed by the EU. The shortfall and financing gap that was due to be covered by the WSC shall now be financed through the Green bonds – €1.7 million – to be exact,” he said.

“This was only possible due to the alignment of the Green Bond principles with the state-of-the-art plant’s indicators,” Cilia added.

This example has led to concerns that funds from the bond will be used to make up for money spent on projects that have already been completed and that are usual rather than innovative.

Statement by WSC on its ‘landmark’ Green Bond.

Malta has been using reverse osmosis plants since the 1970s. “There is nothing innovative or green in this initiative,” according to experts consulted.

They also expressed surprise at the announcement that the already functioning plant would be funded via this instrument despite already being co-funded by the EU.

“This is just a greenwashing exercise to raise funds by the WSC for other projects,” they said.

According to the prospectus, funds will also be used to develop more solar farms and wastewater treatment plants and improve the water network.

“The WSC has been implementing these initiatives for many years. They should have been honest and said they wanted the public to lend the agency more millions through a normal bond and not camouflage it as some innovative green initiative.”

The EU has just warned member states about greenwashing initiatives, particularly the so-called green bonds.

Members of the European Parliament are currently discussing legislation to establish a ‘European green bond standard’, the first in the world, to help prevent companies from presenting themselves as more environmentally friendly than they are.

It will be available to companies and public entities wishing to raise capital market funds to finance green investments and meet strict sustainability requirements.

All the money raised by bonds issued under the European green bond standard must be invested in activities aligned with the EU taxonomy for sustainable activity.


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4 months ago

Misrepresenting the facts in a prospectus for a bond or share issue is a very serious matter. I believe that the Malta Stock Exchange rules are very explicit about this but perhaps someone more expert on this subject can comment.

4 months ago
Reply to  John

The Stock Exchange is as muddy as everything else.

Godfrey Leone Ganado
Godfrey Leone Ganado
4 months ago

Reverse Osmosis Plants were an initiative of the PN, which Dom Mintoff was vociferously against as he used to say that they consume whisky because the price of fuel was as high as the price of whisky.
As regards this issue, it is another case of Labour’s “inbazwru l’hawn u nbazwru l’hemm hif jaqblilna”, or rather retrospective creative accounting.

Gracie D
Gracie D
4 months ago

“Bait and Switch”

George Mangion
George Mangion
4 months ago

Wara il fanfare tlett snin meta gie inaugurat il RO ta Hondoq Ghawdex , wiehed issaqsi kemm haddem dan impjant sissa?? Ma naghmlux kass li wara cerimonji ta ftuh minn PM , il RO ma hadmux ghax bla flus???

4 months ago

All RO Plants have the brine drain showing. There will be a large flow of clean water flowing into the sea near any sea based RO plant. Were is the Hondoq ir-Rummien brine drain? Is there water flow out continuously out of it. Anybody around to see and have video of it?

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