Yorgen Fenech’s personal shares within the ElectroGas deal could have been a front for kickbacks to disgraced former Prime Minister’s Chief of Staff Keith Schembri and former minister Konrad Mizzi, lawyer Jason Azzopardi has suggested.
Speaking in the public inquiry linked to the assassination of journalist Daphne Caruana Galizia, ElectroGas director and shareholder Paul Apap Bologna said he was completely unaware of the claim under questioning from Azzopardi.
ElectroGas is equally owned by three companies – German conglomerate Siemens, Azeri state energy company Socar and GEM Holdings, a Maltese business venture.
GEM Holdings is split between four companies. Tumas Energy and Gasan Enterprises each own roughly 35% of the company. CP Holdings, a company owned by the Apap Bologna family, owns about 20%.
A separate company, New Energy Ltd., owned solely by Fenech, owns about 8%. Azzopardi suggested this company was used for kickbacks.
Apap Bologna insisted that Fenech was granted the 8% personal cut because he was leading the project and ultimately putting most of the work in.
A leaked FIAU report uncovered two attempts to transfer money to 17 Black, Fenech’s Dubai-based company, from Orion Engineering Group, a company connected to Armada Floating Gas Services Malta, owners of ElectroGas’ LNG tanker berthed in Marsaxlokk
According to one e-mail found in the Panama Papers, Schembri and Mizzi were set to receive payments of up to $2 million from 17 Black. The company has since been linked to the controversial Enemalta purchase of Montenegrin windfarms.
The ElectroGas consortium was selected to build and operate the LNG power station in Delimara back in October 2013, with a deal eventually signed in April 2015 and the project inaugurated two years later.
One of the Labour Party’s main pledges ahead of the 2013 general election, the power station was sold to the public as a way of producing clean energy and improving electricity generation efficiency, allowing the government to significantly slash tariffs.
However, the deal itself has raised eyebrows for several years, especially after the Daphne Project revealed in 2018 that ElectroGas was using one of its partners, Socar, as a middleman, when purchasing LNG, instead of purchasing directly at source.
The Guardian estimated that Socar is paying Shell around $113 million a year for LNG and then selling it to Electrogas for $153 million – pocketing a tidy $40 million in the process. Electrogas then sells the LNG to Enemalta for the same price of $153 million and the gas is then converted into electricity and distributed around Malta.
Energy experts have questioned the logic behind this agreement, arguing that Maltese taxpayers would have stood to save tens of millions of euro had Enemalta agreed to purchase LNG directly from Shell.
It has since been revealed that ElectroGas was set to default on major loans, but were saved by government intervention through a €360 million state guarantee and security of supply agreement. Both were signed after Caruana Galizia’s assassination.
Gasan has recently said they are “mortified” by the links between the murder and the controversial deal, pledging to seek an exit strategy from the agreement. Apap Bologna remains faithful in the project, backing an internal review of the deal.
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