Updated at 12. 45pm with government statement. 

Malta will receive a €41 million money transfer from Brussels on Friday, in the form of a “first deposit” of the EU’s COVID-19 recovery funds.  

Government sources said the first tranche of the EU’s Recovery and Resilience Facility will arrive in Maltese government coffers by the close of day.

The funds, part of the EU's €672 billion aid package, are aimed to help mitigate the devastating impact the pandemic has had on Europe’s economy.

Malta was originally allocated €242 million, with the figure later increasing to €320 million. 

Friday's €41 million payment "is a sort of first deposit, you could say, to kickstart the different economic recovery projects we agreed on with the European Commission earlier this year,” a senior government source told Times of Malta.  

In a statement on Friday afternoon, the government confirmed that the first payment of €41 million in pre-financing grants had been received. 

The government said Parliamentary Secretary for European Funds Stefan Zrinzo Azzopardi and Economy Commissioner Paolo Gentiloni had signed a financing agreement for the funds.

“The aim of the pre-financing payment is to help kick-start the implementation of the crucial investment and reform measures outlined in Malta’s Plan for Recovery and Resilience as agreed with the European Commission,” the government said.  

Under EU rules, 37 per cent of funds must be spent on green initiatives, with a further 20 per cent allocated to digital projects - €118 million and €64 million respectively in Malta's case. 

Malta was among the last to present its plans to Brussels, with the cabinet only approving the list of projects and investments in June. European Commission president Ursula von der Leyen praised Malta's plan when she visited the island in September.

What is in Malta's recovery plan?

The Recovery and Resilience Facility aims to address the short to medium term impact brought about by the pandemic.

Seventeen major investments in six areas were proposed as part of Malta's recovery plan, which according to EU rules must prioritise the green economy and digitalisation.

The areas are the circular economy, decarbonisation, digital investments, strengthening the health system, social policy spending, and investing in upgrading Malta’s institutions. 

Proposed Investments to promote the circular economy involve:

• Setting up a pilot near-carbon neutral school to serve as a model for the future and provide a future proof learning experience to students.
• Renovating and greening private and public buildings, including hospitals and state schools. These renovations include deep retrofitting through energy and resource efficiency measures.
• Renewable energy investments on roads and public spaces. 
• New ferry landing places at St Paul’s Bay and Buġibba.
• Pushing the uptake of electric vehicles in the private sector, as well as decarbonising the public service fleet, and part replacement of the public transport fleet.

In the area of digitalisation, investments include:

• Strengthening government's digital backbone, digitising public administration and measures to encourage the private sector to make the digital shift.
• Digitising the Merchant Shipping Directorate within Transport Malta.
• Health system investments involved a new Blood, Tissue and Cell Centre and enhancing the resilience of the health system through new technologies.
• Social policy spending centred around one major investment, namely setting up a new ITS campus to host a centre for Vocational Education Excellence.
• Upgrades of Malta’s institutions would involve the digitalisation in the Justice system.