Malta signs €90m Montenegro wind farm deal while case alleging high-level corruption drags on in court

Prime Minister Joseph Muscat this week cut the ribbon on a €90 million wind farm project in Montenegro on Enemalta’s behalf although a case of alleged political graft and bribery associated with the project’s approval and the former shareholder of the Maltese government’s stake is still dragging on through the Montenegrin courts.

The case claims that the fixers of the Mozura Windfarm bribed politicians with €4 million in commissions to have the project approved, a case on which The Malta Independent has reported extensively in the past.

In an ongoing case lodged back in 2013, Spanish and Montenegrin companies Fersa Energias Renovables and BWP Montenegro, which were previously involved in the project but which

cut their losses and left after crying foul over corruption allegations, allege that the Montenegrin public and prosecutorial authorities have been concealing information about the alleged million-euro corruption linked to the project.

But while the parties continue to fight their legal battles and allege graft, the Maltese government, through Enemalta, decided to step in by acquiring their stake and taking the lead of the wind farm investment in Mozura, which was officially inaugurated by Prime Minister Muscat on Monday.

The wind farm agreement between the Maltese and Montenegrin governments was signed when Montenegro was being led by Milo Djukanovic, who was given the dubious honour of being named the Organised Crime and Corruption Reporting Project’s 2015 Organised Crime Man of the Year.

But to date, more than six years after courts proceedings began in Montenegro and four years since Malta, through thenEnergy Minister Konrad Mizzi, joined the project, it is understood that preparatory hearings in court are still to be heard. Although the Montenegrin judiciary allegedly had sufficient information in the lawsuit that, at the very least, revealed high-level corruption, the Montenegrin prosecutor’s office had not been notified of it.

The Podgorica court is hearing the case in which Montenegrin Budvanin Vladimir Popovic and Spaniard Carles Collo Palou filed a lawsuit against the Montenegrin government’s partners in the project – Fersa Energias Renovables, BWP Montenegro and BWP Europe Consulting – alleging the corruption of their former partners.

The contract for the lease of land and construction of the Mozura hydroelectric power plant was signed in 2010 with the Fersa & Celebic consortium, which included the Spanish firm Fersa Energias Renovables and Celebic’ from Podgorica, both of which have since departed from the contract under a dark cloud and accusations of corruption.

Under this agreement, the owners of the wind farm are to receive subsidies on the basis of a green investment of €115 million for 12 years of operation. The prosecution in the case is investigating suspected corruption following lawsuits they have now filed.

Popovic and Palou claim they were not paid €2 million in commissions each for setting the deal up, and evidence submitted in court as part of the ongoing lawsuit to the lawsuit refer to high-level corruption on the construction of the wind farms.

They state that that their job was to secure the job through the BWP Montenegro firm, represented by Milena Popovic, daughter of long-time Montenegrin union leader Danilo Popovic.

Fersa CEO Anabel Lopez claimed during proceedings that the only company in charge of obtaining permits to build windmills at Mozura was BWP Europe Consulting, and that Fersa had not cooperated with anyone before signing the contract with the Montenegrin government.

However, it turned out that BWP Europe Consulting was never even a company in the first place. According to documents from the Barcelona registry of companies, reported in the Montenegrin press, the company had never been registered in Spain, meaning that Fersa could have signed a contract with someone who did not exist and to whom the money they allegedly gave to BWP Europe Consulting went. But, in the meantime, BWP Montenegro went bankrupt.

In 2015, with the consent of the Montenegrin government, Fersa then transferred the rights and obligations from the lease agreement to Enemalta.

In November 2015, the Maltese government announced its intention to establish a joint venture between Enemalta and Shanghai Electric Power to establish the renewable wind energy project. The agreement was reached after a meeting, held in the Montenegrin capital Podgorica, between Minister for the Economy Vladimir Kavaric and then-Energy Minister Konrad Mizzi.

The multimillion-euro investment is shared between three main entities.

Envision Energy International Limited, a company based in Hong Kong owns 10 per cent of the shares. The company was founded by a certain Lei Zhang, a Chinese entrepreneur.

Twenty per cent of the shareholding belongs to Vestigo Clean Energy, a company based in Port Guernsey, part of the British Channel Islands.

The majority shareholding belongs to the consortium in which Enemalta is involved. Indeed, 70 per cent of the shareholding in this investment belongs to a consortium named International Renewable Energy Development Ltd. This venture is made up of Enemalta and Shanghai Electric Power. State-owned company Enemalta holds 30 per cent of the shares in IRED while Shanghai Electric Power has the remaining 70 per cent.

They had taken over from the former partners by stepping into the fray when they suddenly decided to withdraw from the project and transfer all their rights and obligations to Cifidex, a subsidiary of Vestigo, and to allow Malta’s Enemalta to take the lead in the investment.

The wind farm deal, which would have been overseen in its latter stages by the new Maltese ambassador to Montenegro and erstwhile friend of Prime Minister Joseph Muscat, Karl Izzo, was the first time the Maltese government had extended a hand of friendship and cooperation to the government of Montenegro.

In May 2016, Muscat welcomed former Montenegrin Prime Minister Milo Djukanovic to Malta to sign a memorandum of understanding on healthcare and research between the two countries.

As the two were addressing a press conference, they referred to the wind farm project and Muscat mentioned that construction work was expected to start in the following weeks.

Djukanovic was given the dubious honour, just a year earlier, of being named the Organised Crime and Corruption Reporting Project’s 2015 Organised Crime Man of the Year.