EIB backs with €100 million Malta’s energy transition through second electricity interconnector with Italy

The European Investment Bank (EIB) is supporting Malta’s energy transition by enhancing the country’s electricity infrastructure, boosting security of supply, and facilitating the integration of renewable energy sources. To this end, EIB Vice-President Marek Mora and Malta’s Minister for Finance Clyde Caruana have announced today a €100 million financing agreement to support the development of Malta’s second electricity interconnector with Italy (IC2).

The project consists of the construction of a 122 km alternating current subsea electricity interconnector, operating at a nominal voltage of 220 kV and a frequency of 50 Hz, with a transmission capacity of 225 MW. The cable will connect the Enemalta terminal station in Magħtab, Malta, to Terna’s substation at Contrada Cimillà in Ragusa, Sicily. The operation also benefits from earlier EIB Advisory support during project preparation, including the assessment of its financial and economic viability, ensuring the project’s maturity, financing eligibility and compliance with relevant EU requirements.

“The second interconnector is an important investment in Malta’s long-term economic stability. By strengthening our energy infrastructure, we reduce vulnerability to external shocks, improve supply security, and support stable energy prices for households and businesses,” Minister for Finance Clyde Caruana stated.

Scheduled to enter into operation in the first quarter of 2027, the interconnector will increase electricity interconnection capacity between Malta and Italy, enabling electricity imports from the EU market, strengthening security of supply and grid stability, and supporting demand growth and the integration of renewable energy in line with Malta’s decarbonisation objectives.

“Electricity interconnectors are essential to a secure, integrated and decarbonised European energy system. By backing Malta’s second interconnector with Italy, the EIB is strengthening energy security, facilitating cross-border electricity exchange and renewable integration, while ensuring that growing demand can be met in a reliable and sustainable manner. This project reflects the EIB’s key role in supporting strategic energy infrastructure across Europe,” EIB Vice-President Marek Mora stated.

The total project cost is estimated at 296.68 million euros, financed by EU funds under the European Regional Development Fund with 165.78 million euros, alongside the EIB loan and the Republic of Malta’s own resources. The EU Bank also provided advisory support through JASPERS, a joint initiative of the EIB and the European Commission, offering guidance on project design, procurement and implementation to ensure a robust technical framework and smooth delivery of this strategic infrastructure.

The Government of Malta will retain ownership of the assets. Interconnect Malta, a 100% government-owned company, is responsible for issuing tenders, implementing the project, and operating the assets under a public service obligation. The full interconnector capacity will be made available to Enemalta, Malta’s electricity distribution system operator, under a capacity agreement, with an annual tariff charged for its use.

The EIB in Malta

The European Investment Bank (EIB) has been supporting the Maltese economy since before the country’s accession to the European Union, with its first project signed in 1979 to help expand the commercial port of Valletta Grand Harbour. Since then, the EIB Group’s financing in Malta has exceeded €1 billion, aiding vital sectors such as SME access to finance, urban regeneration, climate action, and telecommunications. The EIB has also supported landmark infrastructure projects that have transformed the heart of Valletta, including the Parliament building and the open-air theatre at the City Gate. As the EU’s long-term lending institution, the EIB remains committed to promoting sustainable investment and fostering economic resilience in Malta and across Europe.