Investment Aid for High-Efficiency Cogeneration
This scheme is targeting entities who invest in cogeneration equipment (i.e. energy efficient solutions that simultaneously generate thermal energy & electrical and/or mechanical energy). The energy generated from this equipment must be used by the undertakings for their direct operation activities.
Scheme is very suitable for undertakings operating hotels, hospitals, commercial buildings and specific industrial processes where there is a steady demand for heat and power throughout most of the year.
Scheme Budget & entry period
The scheme is applicable until 1st March 2019 with a total budget of €5 million. Applications will be processed on a first come first basis. Malta Enterprise may close the scheme before 1st March 2019 if the allocated budget is fully utilized.
Legal & compliance requirements
Applicants must be duly incorporated under the Company’s Act, Chapter 386 in the form of partnership en nom collectif, en commandite or a limited liability company. Therefore sole traders are excluded from this scheme.
Applicants must not be in default on Vat, Income Tax & Social Security obligations. In this regard a clearance certificate from IRD will be required.
Qualifying equipment efficiency
Cogeneration production from cogeneration units shall guarantee at least 10% primary energy savings rate (PESR). There is a specific technical formula mentioned in the guidelines how the PESR should be calculated.
- For new equipment - the extra investment costs required for the installation to operate as high-energy efficiency cogeneration equipment compared to conventional electricity or heating installations of the same capacity.
- Upgrades to existing high-energy efficiency cogeneration equipment – extra investment cost for the upgrade of equipment to achieve higher efficiency.
Form of Aid & Intensity
The assistance will be in the form of tax credit as per below:
Type of Undertaking
Undertaking type criteria
Aid % based on eligible cost
<50 employees AND ≤€10 million balance sheet total
<250 employees AND ≤€43 million balance sheet total
≥250 employees AND >€43 million balance sheet total
A minimum investment of €15,000 is required.
Application & adjudication
Application by undertakings shall be submitted to Malta Enterprise prior to incurring any expenditure. Successful applications are issued an Incentive Entitlement Certificate (IEC) by Malta Enterprise.
Beneficiaries would need to have the IEC prior to buying any equipment.
As part of the application, undertakings should provide a full list of items & specifications of the equipment being purchased.
A claim form and copies of the following documents certified as true copies by a Certified Public Accountant must be submitted:
- Copy of tax invoice in line with the 12th schedule of the Vat Act and an associated receipt;
- Copy of tax invoice in line with the 12th schedule of the Vat Act marked as paid by the supplier;
- Copy of Fiscal Receipt as specified in the 13th schedule of the Vat Act.
Utilization of tax credits
Tax credits cannot be utilized for a year of assessment unless the beneficiary submits an annual investment assessment report certified by a warranted engineer and verified by SEWCU. The Investment Assessment Report may be downloaded from Malta Enterprise website.
Any unabsorbed tax credits can be carried forward to subsequent years.
Application forms & additional Information
Scheme’s official documents can be viewed from the Malta Enterprise website.