First Green Bond in Malta issued by the Water Services Corporation Group

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On the 20th of July 2023, ClearFlowPlus p.l.c., a fully owned subsidiary of the Water Services Corporation, the main water services provider in Malta, has published a Prospectus in respect of the issue of up to €25 million 10-year bonds, to finance certain green projects of the Group, and which is marketed as the first Green Bond ever issued in Malta.

The Bonds are unsecured, will pay a coupon rate of 4.25% per annum, will be issued at their nominal value of €100 per Bond and will be redeemed at such nominal value in 10 years’ time, namely on 25th August 2033.  The Bonds will bear ISIN Code: MT0002751205 (the “Bonds”).  They are proposed to be listed and traded on the Malta Stock Exchange’s Green Bond List.  The Bonds and the Issuer’s payment obligations thereunder will be guaranteed jointly and severally by the Issuer’s parent undertaking, the Water Services Corporation.

The Bonds have been assessed by the Issuer and have been independently verified as complying with the requirements and parameters set out in the Malta Stock Exchange Bye-Laws, Chapter 5, “Additional Conditions for Admission to the Malta Stock Exchange Green Bond List”, and accordingly also the International Capital Market Association (ICMA) Green Bond Principles and the EU Taxonomy Regulation (Regulation (EU) 2020/852).

The WSC Group intends to use the Bond proceeds to finance certain green projects and initiatives of the Group, including:

  • To finance the expected capital expenditure involved in procuring, installing and commissioning new photovoltaic plants to be installed on various reservoirs and other locations owned or used by the Group situated in various regions of Malta, which increases generation of renewable energy and helps reduce Malta’s carbon footprint and greenhouse gas emissions;
  • To re-finance of part of the costs incurred in connection with the development and commissioning of the most recent reverse osmosis plant in Ħondoq ir-Rummien, which has been designed to use latest technologies and to achieve higher energy efficiency performance;
  • To finance the expected costs involved in upgrading the airblowers and the aeration system within Ta’ Barkat wastewater treatment plant, which are intended to achieve ‘inter alia’ higher energy efficiencies through reduction in energy consumption and carbon emissions;
  • To finance investments in projects, in particular the upgarde to the Water Services Corporation’s Enterprise Resource Planning (ERP) – SAP system and the algorithmic software therein, aimed to further reduce non-revenue water and improve billing efficiencies, and thus enhance protection of water availability by ensuring that users are accountable for water usage and by the creation of a healthy nation-wide consciousness that water has an intrinsic environmental, social and financial value, that cannot be capriciously wasted without material consequences, and also to avoid the social injustice and imbalance created by apparent losses of water, whereby some consumers are paying for water consumed and unbilled by other end users;
  • To finance investments in continuing projects related to upgrading the water distribution network and infrastructure, in particular those connected with the repair, replacement, maintenance and where necessary rerouting or redesigning of such network and infrastructure, to achieve reduction in water losses and wastage, improved water quality and increased reliability of the water distribution network.

Saliba Stafrace Legal is honoured to have had the opportunity to participate as legal advisor to the Issuer in respect of the Green Bonds issue, and to have worked with an enthusiastic management team within the Issuer’s Group and its external financial advisors and other service providers.  The firm looks forward to further its contribution and extend its services in other future green bond issues and generally to continue expanding and intensifying its involvement and legal practice and expertise in capital market instruments and projects.