EIB keeping close watch on Malita Investments amid severe cash problems at Luqa housing project

The European Investment Bank is closely monitoring Malita Investments p.l.c. following the Maltese government’s vehicle encountering cash flow problems with a social housing development in Luqa, which is partly financed by an EIB-backed loan.

The Luxembourg-based lender, which extended a €22 million facility to Malta’s government for the project, has held discussions with Malita following recent financial setbacks, according to sources familiar with the matter.

An EIB spokesperson declined to comment on specific financial issues but confirmed to The Shift that the institution was “aware of the situation and is monitoring developments closely.”

The difficulties at Malita, revealed by The Shift, come amid a series of senior departures. The company’s chief financial officer, Michele Abela, and company secretary, Donald Vella, have both resigned in recent months, following the earlier departure of Chief Executive Jennifer Falzon.

It is not clear whether the resignations are linked to the liquidity pressures facing the company.

Contractors on the Luqa site have reportedly suspended work over unpaid dues, estimated to total several hundred thousand euros.

The Luqa development — consisting of three blocks and 267 units, and described as one of Malta’s largest ongoing social housing schemes — has effectively stalled. Industry sources said Malita has exhausted its available funding, prompting Housing Minister Roderick Galdes to seek additional capital support.

However, the Finance Ministry has so far resisted requests for a government injection, citing concerns over potential state aid implications. Officials have instead urged the housing ministry to find an alternative solution to keep the project on track.

Malita, chaired by Johan Farrugia, acts as a financing vehicle for the Maltese government’s housing initiatives. The state holds an 80 per cent share, with the remainder listed on the Malta Stock Exchange and owned by private investors.

Earlier this year, the company announced it would suspend its annual dividend for the first time since its inception, citing “liquidity constraints.” In a subsequent market statement, Malita confirmed The Shift’s revelations and said the financial strain had prompted a “comprehensive strategic review” of its affordable housing activities.

The company’s board includes several politically appointed directors, among them Tania Brown, former private secretary to ex-Finance Minister Edward Scicluna, Víctor Carachi, the President of the General Workers Union and Miguel Borg, former chief risk officer at Bank of Valletta, forced out following a massive loan to the now-defunct hospitals concessionaire.