The Malta Development Bank: A catalyst of alternative finance
“The Malta Development Bank’s strategic objective is to address market failures by offering financing facilities to support productive and viable operations where the market is unable or unwilling to accommodate such activities on its own in whole or part. Its operations will focus on the provision of facilities to SMEs and infrastructure projects that contribute to national or regional development,” stated Minister for Finance Edward Scicluna when he was addressing a conference entitled “Investment and Investment Finance – the case of Malta” on Tuesday.
The conference was organised jointly by the European Investment Bank and the Central Bank of Malta and attended by senior officials from leading public and private institutions, embassies and commercial companies.
Minister Scicluna stated that rather than being driven by purely commercial considerations and profit maximisation, the Malta Development Bank would be primarily committed to support socio-economic objectives in the public interest. It will thus be complementing and supplementing the operations of market players in the financial system, rather than offering any form of competition. In effect, it will be operating as a lender of last resort on a non-competitive basis as well as financing those projects, such as large infrastructure projects, which because of their long gestation period and risk profile; will inhibit commercial banks to finance such investment.
The Finance Minister also said that the Malta Development Bank could also act as a catalyst to encourage credit institutions to participate in syndicated loans for local infrastructure development, provide guarantees; or cofinance such projects with credit institutions or directly under a Public-Private Partnership initiative.
“Malta’s Development Bank will also seek opportunities to increase the utilisation of the European Fund for Strategic Investments and enhance the financing of infrastructure by blending its resources with other EU funding instruments,” concluded
02 Minister Scicluna.