Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.

Multilateral Development Banks:

U.S. Commercial Service Liaison Offices at the Multilateral Development Banks (World Bank)
The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help businesses that create U.S. jobs learn how to get involved in bank-funded projects and how to connect to other parts of the International Trade Administration, including the U.S. Field; the overseas network of Commercial Service offices; and, in Washington, desk officers, sectoral experts and the Advocacy Center.

Web Resources
Commercial Liaison Office to the European Bank for Reconstruction and Development: http://export.gov/ebrd
Commercial Liaison Office to the World Bank: http://export.gov/worldbank

Banks constitute the main source of financing for commercial projects, although the Government of Malta finances most of its current infrastructure projects, increasingly through public-private partnerships.  The EU, through the European Structural and Investments Funds, also co-finances certain infrastructure projects.  Indeed, EU financial assistance programs provide a wide array of grants, loans, loan guarantees, and co-financing for feasibility studies and infrastructure projects in a number of key sectors such as environmental, transportation, energy, telecommunications, tourism, and public health.  From a commercial perspective, these initiatives create significant market opportunities for U.S. businesses,
 

U.S.-based suppliers, and subcontractors.

Government bonds dominate the local bond market in Malta.  Maltese companies have so far issued a limited number of bonds in Malta, but this trend has been on the rise.  The Government of Malta established the Venture Capital Malta (VC-MT) in 2015 to spearhead venture capital, especially for new entrepreneurs who had previously found it difficult to satisfy local commercial banks’ requests for collateral assets. 

Credit cards are widely available and frequently used for retail transactions.  Businesses often use checks for business to business transactions.  Most commercial bank liabilities are in the form of savings deposits.  Most bank loans are short and medium term.

Neither Export-Import Bank nor Overseas Private Investment Corporation (OPIC) has been active in the local market.  The last OPIC delegation to Malta occurred in 1991.
 
The EU supports projects within Member States, as well as EU-wide "economic integration" projects that cross both internal and external EU borders.
 
EU Structural and Investment Funds (ESIF)
 
EU Structural Funds, including the European Regional Development Fund and the European Social Fund, mitigate economic and social differences between the EU’s regions.  New budgets are approved every 7 years for all Member States. The budgets and the allocation of funding between the different priorities (social, economic, or environmental) are based on the conclusions of “Partnership Agreements” (PAs), which are negotiated between the European Commission and the Member State national authorities.  For the period of 2014 – 2020, the EU has earmarked approximately $375 billion for regional development and cohesion policy projects.  For information on approved programs that will result in future project proposals, please visit ec.europa.eu/regional_policy/index_en.cfm.
 
For projects financed through ESIF, Member State regional managing authorities are the key decision-makers. They assess the needs of their country, investigate projects, evaluate bids, and award contracts.  Businesses interested in tapping into ESIP funds for projects in Malta should develop a sound understanding of the country’s cohesion policy indicators.
 
Tenders issued by Member States’ public contracting authorities for projects supported by EU grants are subject to EU public procurement legislation.  All ESIF projects are co-financed by national authorities and many may also qualify for a loan from the European Investment Bank and EU research funds under Horizon 2020, in addition to private sector contribution.  For more information on these programs, please see the market research section on the website of the U.S. Mission to the EU at export.gov/europeanunion/marketresearch/index.asp.
 
The Cohesion Fund
 
The Cohesion Fund is another instrument to support the EU’s regional policy.  Its $70 billion (2014-2020) budget is used to finance projects in two areas:

  • Projects relating to trans-European transport, including transport infrastructure; and
  • Projects relating to the environment, including sustainable development and energy for projects with environmental benefits.
The fund supports projects in Member States whose Gross National Income (GNI) per inhabitant is less than 90 percent of the EU average.  Malta qualifies for this funding.
These projects are co-financed by national authorities, the European Investment Bank, and the private sector.  More information is available at ec.europa.eu/regional_policy/thefunds/cohesion/index_en.cfm.
 
Other EU Grants for Member States
 
Other sets of sector-specific grants, such as Horizon 2020, offer assistance to EU member states in the fields of science, technology, communications, energy, security, environmental protection, education, training, and research.  The European Commission and the relevant Member State authorities related to these grants post the tenders on their websites.  Participation is usually restricted to EU-based firms or tied to EU content.  However, certain exceptions exist, so we encourage U.S. firms to inquire about their eligibility for any projects of interest.  Information pertaining to each of these programs can be found at ec.europa.eu/grants/index_en.htm.
 
The Connecting Europe Facility (CEF) is an EU financing mechanisms that uses the EC budget as well as the Cohesion Funds to finance projects in three key areas:  energy, transport and telecom.  Along with the European Fund for Strategic Investments (EFSI), CEF plays a role in bridging the investment gap in Europe, which is one of the Commission's top priorities.  In all three main categories the focus is on creating better conditions for growth and jobs.  Annual and multi-annual work programs specify the priorities and the total amount of financial support allocated for these priorities in a given year. 
 
Projects supported through the CEF mechanism focus on the following:
  • cleaner transport modes;
  • high speed broadband connections;
  • use of renewable energy (in line with the Europe 2020 Strategy);
  • integration of the internal energy market;
  • reduction of the EU's energy dependency; and
  • ensuring security of supply. 
 
The total budget of the CEF for the period 2014 to 2020 is set at about $37 billion.  This amount is distributed between the main priority areas as follows:
  1. transport sector: $29 billion, of which $1 billion is transferred from the Cohesion Fund to be spent in Member States eligible for funding from the Cohesion Fund;
  2. telecommunications sector: $1 billion;  and
  3. energy sector:  $6 billion.

Loans from the European Investment Bank
 
Headquartered in Luxembourg, the European Investment Bank (EIB) is the financing arm of the European Union.  Since its creation in 1958, the EIB has been a key player in building Europe.  As a non-profit banking institution, the EIB assesses, reviews, and monitors projects, and offers cost-competitive, long-term lending.  Best known for its project financial and economic analysis, the EIB offers loans both to private and public borrowers for projects supporting four key areas:  innovation and skills, access to finance for smaller businesses, climate action, and strategic infrastructure.
 
While the EIB mostly funds projects within the EU, it lends outside the EU as well (e.g., in Southeastern Europe, Africa, Latin America, and Pacific and Caribbean states).  The EIB also plays a key role in supporting EU enlargement with loans used to finance improvements in infrastructure, research, and industrial manufacturing to help those countries prepare for eventual EU membership.
 
The EIB presents attractive financing options for projects, as EIB lending rates are lower than most other commercial rates.  Projects financed by the EIB must contribute to the socioeconomic objectives set out by the EU, such as fostering the development of less favored regions, improving European transport and environment infrastructure, supporting the activities of SMEs, assisting urban renewal and the development of a low-carbon economy, and generally promoting growth and competitiveness in the EU.  The EIB website displays lists of projects considered for approval.  For more information, see our report on the EIB.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.