Opinion: Funding Malta’s Green Future… And How The Islands Can Lead The Way Towards A Carbon-Neutral Future
Like every member state, Malta is committed to decarbonise its economy in the next three decades. To embark on this transformative journey, our nation, like all other EU member states, must secure substantial capital investments essential for reshaping our industries.
A significant opportunity lies within the considerable financial resources already available. Malta currently holds approximately €24 billion in bank deposits, predominantly owned by local residents inclined to invest in the domestic economy.
At this pivotal moment, activating this capital and redirecting it towards unconventional economic endeavours is paramount.
Green finance is key for the necessary economic transition. Malta’s recent issuance of its first ever Green Bond is a testament to local investors’ appetite for green and sustainable projects.
This green bond will see €25 million invested in renewable energy and water management projects that will yield Maltese investors nothing short of €11 million in the next 10 years.
Imagine what we can achieve if we extend this financing model to all our industries and sectors.
Scaling this financing model across all sectors could drive our ambition for a Maltese economy powered by renewable energy sources, liberating us from reliance on imported fossil fuels.
The seas surrounding us hold immense potential for clean energy generation.
The government’s initiative to attract international investments in the Exclusive Economic Zone opens avenues for expanding our blue-economy opportunities. Marine renewable energy, including offshore solar, wind, and wave energy, not only promises economic growth but also the creation of high-skilled jobs and technological innovation.
Commencing battery storage projects in 2024 will further accelerate the shift towards renewables.
In pursuing sustainability, acknowledging the role of private capital alongside public funding is crucial.
Collaboration among financial institutions, the private sector, and government agencies is not just beneficial but imperative. Small and Medium-sized Enterprises (SMEs) hold a pivotal position but often struggle with limited access to capital markets. Simplifying funding avenues for European and Maltese SMEs becomes a pressing necessity.
Fiscal incentives for Maltese investors supporting green initiatives could be transformative.
Moreover, as the demand for sustainable properties rises, there’s an opportunity to expand green financing for eco-friendly construction projects. Although some banks in Malta offer green loans, the market remains relatively modest.
To match the increasing interest in sustainable real estate, enhancing green construction financing options is vital. This aligns with evolving preferences for environmentally responsible property solutions and stimulates the transition to eco-friendly construction practices.
Transitioning to a quality-driven economic model also entails prioritizing digitalization. Investing in research, digital processes, and specialized skills is essential. Malta’s recent financial support for STMicroelectronics Malta, part of an EU initiative to bolster microchip production, demonstrates this commitment.
By embracing green finance, fostering innovation, and prioritising sustainability, Malta can lead the way towards a carbon-neutral future, setting an example for the world.
The changes required are challenging but not insurmountable; they are essential for our future. Let’s not delay action until tomorrow; today is the day we can make a difference.
Steve Ellul is a financial expert who was last year appointed as the CEO of the newly-formed government agency Project Green.
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