Updated 5.30pm

The government has diverted funds away from two large construction projects and into the energy sector as part of a revised plan of how it will spend €328 million in EU 'recovery and resilience' grants. 

Investment in the electricity grid and reforms surrounding renewables have been prioritised while the funds for construction of a ferry dock in Buġibba and a new building on the ITS campus have both been pulled.

The renovation of Mount Carmel hospital and the digitilisation of the health sector have also been scaled down as part of the move. 

Thse funds were set aside to help member states deal with the costs of the Covid-19 pandemic and to meet climate and digitalisation goals.

However, the Infrastructure Ministry later said the Buġibba terminal will still go ahead as part of the Buġibba breakwater project, which is co-financed by the European Regional Development Fund. 

The ferry terminal will "eventually" link Buġibba to Sliema, Valletta, or Cottonera, the ministry said. 

As part of the revised EU reslience and recovery fund application, investments in the grid will include better battery storage and energy distribution capabilities, while the reforms are aimed at streamlining permits for renewables and making solar panels mandatory for certain new buildings.

Overall spending on climate-related projects is also up 15 per cent in the revised plan, now representing almost 70 per cent of the total funds allocated. 

By prioritising investment and reforms to the energy sector, the government will be able to make use of additional grants worth almost €30 million as part of the European Commission's REPowerEU, a proposal to wean Europe off Russian energy by 2030.

The new plan now devotes 26.2% (up from 25.5%) of its total allocation to support the digital transition, which includes investments to digitalise the public administration, to strengthen the government’s IT systems and enhance digital public services. Malta’s plan also includes investments in the digitalisation of at least 360 companies, in particular SMEs.

The government has also requested to transfer the €40 million allocated to Malta as part of the Brexit Adjustment Reserve towards the plan.

Both of these combined bring the total funds up from €258 million to €328 million.

The changes were brought in after almost €60 million in funding was withdrawn by the EU following Malta's better-than-expected economic results in 2020 and 2021 and the increased cost of investments following the war in Ukraine, according to the European Commission.

The main bulk of the funds are distributed as part of the NextGenerationEU plan, an EU-wide recovery package designed to support member states through the recovery from the COVID-19 pandemic. 

So far, Malta has received over €90 million in recovery funds since December 2021.