The Malta De­vel­op­ment Bank: A cat­a­lyst of al­ter­na­tive fi­nance

The Malta Business Weekly - - FRONT PAGE -

“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.

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