“The hedging deal saved Malta about 125 million euros.”-Joseph Muscat

Former Prime Minister Joseph Muscat defended Malta’s hedging agreement today, saying: Malta has saved about 125 million euros.

Muscat said Malta would have paid a much larger amount when comparing the amount paid by the state during the five years of the hedging agreement with the amount paid if the interconnect was used alone.

“When switching from heavy oil to gas, the Nationalist Party opposed the construction of a new power plant, despite environmental, health and economic benefits,” Muscat said in a Facebook post released Wednesday.

“PN said it wasn’t necessary because it uses the interconnector alone,” Muscat said.

“Malta’s economy has grown in recent years to the extent that it is already at full capacity, as well as not requiring new power plants,” he added.

In a Facebook post, Muscat once said that Malta could save 20 million euros a year by using interconnectors.

He claimed that this was an “wrong number” because the person who calculated this amount forgot to amortize it, including the cost of capital.

In addition, they also said Malta was losing money in a hedging agreement with Azerbaijan where the Labor Party set gas prices for five years.

“Stakeholders who say such things seem to be unaware of the simple rules of hedging as insurance to ensure price stability, and the best time to make such an agreement is price. It’s time to go low, not high, “Muscat said.

He said Azerbaijan is now a country where the whole of Europe is “now queuing and knocking on its doors.”

In recent months, Muscat said such criticisms of energy mix policies (PV, LNG, interconnection) seem to have ceased.

He said, “Our decision to hedge to ensure stability is to the extent that Malta has the lowest invoices in Europe, contrary to the advice of those who shattered the country with high invoices. The result was that the price of the invoice went down. “

Thus, it’s easy to understand why we refrained from criticizing Malta’s energy policy, Muscat said.