Enemalta was saved from losses that could have hit the €60 million mark in 2021, thanks to government cash injections.

On the face of it, Enemalta declared a €30 million profit for that year, a massive swing from the €35 million in losses declared the previous year.

No official announcement was made by Enemalta about this profit, and a deeper dive into the state-owned energy provider’s accounts shows how the company was propped up by €93 million in government payouts.

Enemalta was given a total of €63 million in government “compensation” for increases in electricity generation costs in 2021.

The accounts said these payments were in fulfilment of the government’s “social obligations” to maintain electricity price stability.  Enemalta has continued to sell electricity to consumers at 2014 prices, even though its costs to provide that same energy for sale to the domestic market have increased significantly.

The accounts show Enemalta also received a second handout – a €30 million payment to make good for the losses it incurred in 2020. The payment was booked into the company’s 2021 accounts as “operating income”.

Both of those years were turbulent ones for the company.

The company’s directors said Enemalta faced reduced electricity sales and reduced bill payments as a result of the COVID-19 pandemic in 2020 and 2021.

'Enemalta broke even'

A spokesperson for the energy ministry argued that “when taking the two years into consideration, Enemalta broke even”.

The spokesperson further pointed out that Enemalta incurred additional costs after the Malta-Sicily interconnector was damaged in December 2019, leading it to operate reserve plants until the subsea cable was repaired and returned to full operation.

Costs of energy production remained high last year, as a result of the global fallout from Russia’s invasion of Ukraine in February 2022.

Prime Minister Robert Abela said this month that electricity subsidies are set to hit €1 million daily.  Instead of raising electricity bills and compensating consumers directly, the government has instead opted to pump money into Enemalta, which is one-third owned by Shanghai Electric.

The subsidies have also helped Enemalta retain stable credit ratings with international agencies.

In April, S&P Global Ratings upgraded Enemalta’s long-term rating from B+ to BB- and predicted a stable outlook for the company’s future.

This is because the government provided “continuous and timely” financial support to the energy company and will probably continue to compensate for its losses in the near future, the agency said.