Malta’s Existing Buildings are Central to the Green Transition

By Alison Micallef, Chief Executive Officer, Malta Development Bank

Malta’s changing climate is placing greater demands on our buildings. Longer heatwaves and growing pressure on energy systems are changing how buildings need to perform. These conditions have direct implications for architects, engineers, and everyone involved in shaping the built environment.

Upgrading Malta’s existing building stock must become a central part of our sustainability agenda. We live in a densely built country with limited land, while construction carries an environmental cost through the materials, transport and energy it requires. Many of the buildings already around us can continue serving our communities and economy for decades if we invest in their performance and adaptability.

This calls for a wider view of sustainable design. Every project should begin with a careful assessment of the value already present in the site, including its structure, materials, identity and potential for improved energy performance. Reuse can preserve these qualities while giving a building a viable new purpose.

The redevelopment of the former Royal Naval Hospital in Mtarfa provides a clear example. Over the years, the historic building served as a secondary school and housed public-sector offices. Following the school’s relocation, much of the site became underused.

The building has now been rehabilitated and converted into the permanent campus of Haileybury Malta. An Energy Performance Certificate prepared by an accredited assessor indicates that the building’s assessed primary energy use is approximately 75 per cent lower than before the redevelopment, with its EPC rating improving from E to A. The project has returned a historic building to active use while significantly improving its energy performance.

Malta Development Bank (MDB) mobilised €10 million for eligible climate-action and environmental-sustainability investments forming part of the redevelopment. This comprised €5 million in direct financing from MDB and €5 million from a commercial bank, with MDB also providing a guarantee covering part of the commercial bank’s share of the facility.

This financing reflects an important principle for the Malta Development Bank: sound environmental projects need financial structures that match their scale, risk and repayment period. A strong design and a measurable environmental outcome must be supported by a credible route to investment.

MDB supports green investments of different sizes through two schemes, both supported by the European Investment Fund under the InvestEU Sustainability Guarantee. Under the SME Guarantee Scheme for Sustainability, eligible businesses may apply to participating commercial banks for loans of between €10,000 and €1 million, with up to 10 years to repay. MDB provides participating banks with an 80 per cent guarantee on a portfolio of eligible loans, reducing their credit risk and helping facilitate access to finance.

For eligible financing exceeding €1 million and up to €10 million, the Guaranteed Co-Lending Scheme for Sustainability brings together MDB’s own financing, lending from a participating commercial bank and guarantee support from the European Investment Fund under InvestEU. MDB and the commercial bank each provide half of the facility, while MDB guarantees 60 per cent of the commercial bank’s share. Repayment terms can extend to 15 years.

These structures can help reduce collateral requirements, support more favourable financing terms and provide the longer repayment periods that major sustainability investments may require. They help commercial banks support viable projects whose environmental and economic benefits will be realised over many years.

Eligible renovation works can include insulation, replacement of windows and doors, upgrades to heating and cooling systems, renewable energy installations and other measures that deliver a meaningful improvement in energy efficiency. Subject to the applicable eligibility and credit requirements, sustainability financing may cover the wider building investment rather than individual energy-efficiency measures alone.

Support is also available for eligible new commercial buildings with a gross floor area of up to 5,000 square metres. The completed building must achieve an energy performance at least 10 per cent better than Malta’s Nearly Zero-Energy Building standard.

Architects and engineers have an important role in bringing these opportunities forward. They are often among the first professionals to assess whether a building can be adapted, how its energy performance can be improved and which interventions will deliver the greatest long-term value. Early engagement between these professionals, clients and financial institutions can connect design decisions with suitable financing from the planning stage.

At MDB, we believe that finance should enter the sustainability discussion early. When architects, businesses, developers and financial institutions engage during the planning stage, eligibility requirements can be considered as part of the project itself. This gives viable investments a clearer route from design to delivery.

Malta’s existing building stock represents a significant environmental and economic opportunity. Improving these buildings can lower energy use, extend their working life, protect valuable assets and return underused properties to productive use. With the right design choices and financial support, more of Malta’s buildings can meet the needs of a changing climate and continue serving the country for generations.

MDB welcomes early discussions with architectural practices, businesses and developers preparing eligible investment plans. Further information is available on the MDB website under MDB Sustainability, and enquiries may be sent to business.mdb@mdb.org.mt.