## Taking Stock of Infrastructure in Malta (Section 1)

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### A. Introduction
- Growth and income:
  - Between 2014 and 2019, growth averaged 7½ percent per annum.
  - Per-capita income rose from 69 percent of the Euro Area average to 84 percent, and further to 92 percent in 2023.
  - Output contracted by only 3.5 percent in 2020.
- Demographics and tourism:
  - Since 2014 the population has grown by one-quarter to around 563,000 at end-2023.
  - Population density: 1,789 persons per km2 (and on the main island to 2,121 persons per km2).
  - Tourism arrivals increased from 1.7 million in 2014 to just under 3 million in 2023.
  - Eurostat population projection: population projected to grow by 28 percent by 2040 under the baseline and could approach 40 percent in a high-immigration scenario (assumes a gradually declining net immigration from 2028 onward).
- Main infrastructure segments assessed: power supply, water supply, wastewater treatment, solid waste disposal, and transportation.

### B. Power
- Demand and climate:
  - Peak electricity demand rose from 465 MW in 2018 to 663 MW in 2023 (an increase of 43 percent).
  - Population and tourists in peak summer season rose by 13 percent over the same period.
  - Mean temperature in the hottest month rose from 27.3 °C to 29.6 °C; peak temperatures rose from 34 °C to almost 42 °C over the same period.
- Electric vehicles (Box 1: Electric Vehicles):
  - At end-2023, about 1.3 percent of passenger cars were fully electric (EU average: 1.7 percent, EU median: 1 percent).
  - 7.8 percent of motorcycles were fully electric.
  - Overall, 13,000 EVs registered (more than 60 percent are motorcycles, e-bikes, and scooters) out of 438,000 vehicles in total.
  - Government target: increase EVs to 65,000 by 2030, representing about 13 percent of all vehicles; this implies annual growth of 26 percent from end-2023 (assumes population grows in line with baseline projections and the ratio of vehicles to population remains constant at 0.81).
  - Policies: large subsidies to encourage EV purchases (subsidies reduced in 2025 but remain generous), scrapping incentives for conventional cars, installing EV charging network, procuring electric buses.
  - EV impacts: EVs add to overall electricity demand; may not necessarily add to peak demand and can act as flexible storage.
- Current capacity and planned additions:
  - Installed capacity (table reported): generation total 777, fossil fuels 533, photovoltaic 241, other renewable 3, import 225, total 1,002.
  - Additional temporary diesel power generation capacity of 60 MW installed in 2023.
  - Second interconnector of 225 MW capacity scheduled for completion in 2026.
  - Planned additions: battery storage, a waste incinerator, continued growth of renewables, further PV capacity, battery storage, and offshore wind (floating platforms due to Mediterranean depth).
- Demand projections and security:
  - Authorities project peak power demand could increase by around 30 percent by 2040 under a high-temperature and high-population growth scenario; under this scenario new generation and/or import capacity would be needed around 2033.
  - Assessments underway for post-2030 options including further interconnectivity to address the N-1 policy (power supply must be guaranteed even in the event of the failure of the largest power plant or the interconnector).
  - Need for investments in smart grids to integrate EVs as flexible storage units.

### C. Water
- Supplier and allocation:
  - Water Services Corporation (WSC) supplies water for households and services; 90 percent of WSC water is directed to these sectors.
- Current supply mix:
  - Around 36 percent of public water supply from fresh groundwater and surface water.
  - Remainder produced by reverse osmosis (RO) desalination plants.
- Groundwater and desalination volumes:
  - Groundwater abstraction relatively stable at around 13 million m3 per year.
  - Desalinated water production increased from around 17 million m3 per year during 2004-13 to around 20 million m3 in 2014-23, and 24 million m3 in 2023.
- Losses:
  - Losses reduced significantly since 2004 but still amount to some 10 percent of total water pumped into the mains.
- Future demand and capacity:
  - Baseline population projected to 695,000 by 2040 and tourist arrivals assumed to grow at 3 percent per year.
  - Estimated fresh water demand about 45 million m3 per year by 2040.
  - If groundwater abstraction declines from around 13 million m3 to 10 million m3 over next 10 years and losses contained at around 4 million m3 (loss rate below 10 percent), then desalinated water production need is about 36 million m3 per year by 2040.
  - Current RO plants capacity: 35 million m3 per year.
  - Planned investments: increase capacity to 41 million m3 in 2025 and 47 million m3 by 2028.

### D. Wastewater
- Coverage and treatment:
  - Entire population of Malta is connected to wastewater treatment plants (first country in the EU).
  - Urban wastewater discharged untreated into the sea currently at 30 percent.
  - Share of wastewater receiving at least secondary treatment according to EU requirements is 7½ percent (EU average: 81 percent); average pollution removal rate is 80 percent.
  - Situation: Violates EU directives.
- Current and planned measures:
  - Several wastewater treatment and sludge management facilities to be upgraded by 2027.
  - Authorities plan to disconnect farmyard waste from urban wastewater collection network to improve operational capacity.
  - Measures underway to curb seawater infiltration and stormwater runoff intrusion.

### E. Solid Waste
- Recycling and generation:
  - Circular material rate reached 15 percent in 2022 (EU average 11½ percent, EU median 7½ percent).
  - Waste generation per capita (households and service industries) reduced to around 0.7 tons by 2010 but progress stalled thereafter.
  - Construction sector waste: 3.9 tons per capita (EU average 1.9 tons).
- Treatment and trends:
  - Landfill usage around 300,000 tons/year has remained broadly unchanged; incineration and recycling have increased.
  - Planned/needed measures:
    - More investments needed to cope with increasing solid waste volumes.
    - Incineration increasing; a waste-to-energy plant is being planned.
    - NRRP includes a strategy to reduce construction sector waste by increasing recycling rates.

### F. Transport
- Spatial constraints and comparative indicators:
  - Area (km2): Malta 315; Singapore 736; Balearic Islands 4,984.
  - Population (1,000): Malta 520; Singapore 6,037; Balearic Islands 1,187.
  - Population density (persons/km2): Malta 1,649; Singapore 8,207; Balearic Islands 238.
  - Road network (km): Malta 2,841; Singapore 9,644; Balearic Islands 2,155.
  - Roads/km2: Malta 9.0; Singapore 13.1; Balearic Islands 0.4.
  - Roads/1000 persons: Malta 5.5; Singapore 1.6; Balearic Islands 1.8.
  - Cars/road km: Malta 112; Singapore 693; Balearic Islands 63.
  - Cars/100 persons: Malta 61; Singapore 11; Balearic Islands 66.
  - Cars per km2 of artificially covered land: Malta 3,658; Singapore 1,736; Balearic Islands 1,724.
  - Buses/road km: Malta 0.8; Singapore 1.9; Balearic Islands 1.2.
  - Buses/100 persons: Malta 0.5; Singapore 0.3; Balearic Islands 0.2.
  - Rail network: Malta no; Singapore yes; Balearic Islands no.
  - Artificial land (cover, % of total, 2018): Malta 27.5; Singapore 52.3; Balearic Islands 9.1.
  - Residential buildings (use, % of total, 2018): Malta 17.8; Singapore 14.1; Balearic Islands 8.6.
  - Transport (use, % of total, 2018): Malta 4.9; Singapore 11.4; Balearic Islands 2.6.
- Public transport and congestion:
  - Public transport is free for residents.
  - Bus fleet: one bus for every 200 persons (more than twice as many as in the Balearics).
  - Take-up of buses increased but remains limited; travel times relatively long and buses affected by congestion.
  - Government plans: manage traffic flows across the day, introduce express bus lines.
  - Policy trade-offs: reducing car use would likely require measures to increase costs (e.g., raising fuel prices, vehicle taxes, introducing charges for public parking), which the government currently does not intend to pursue.
- Infrastructure constraints and modal options:
  - Road network very dense (nine kilometers of road per square kilometer).
  - Expansion of road network likely only briefly relieves congestion as car ownership and use tend to rise with more roads.
  - Rail-based public transport considerations:
    - A metro would require investments amounting to about 34 percent of GDP (spread over 15-20 years).
    - A tram network would be more efficient than buses but would require surface space for tracks, constrained by geography and cost.

### G. Conclusions (cross-cutting)
- Main constraints and needs:
  - Rapid population growth and high tourist arrivals have created bottlenecks in infrastructure that need to be addressed in the medium term.
  - Energy and water supply capacity currently adequate, but:
    - Investments needed in wastewater treatment and solid waste disposal.
    - Measures required to reduce greenhouse gas emissions and enhance energy efficiency and flexibility (including smart grids and storage integration).
  - Transport congestion is urgent; sustainable solutions are costly and take time to implement.
- Ongoing and planned investments cited as critical:
  - Second interconnector, RO capacity expansion, wastewater upgrades, waste-to-energy, NRRP measures.

### sipea2025007 - Section 2

### Summary of investment needs and timing
- Overall:
  - Malta faces significant investment needs in the short and medium term.
  - Power and water supply capacities are adequate in the short term, but investments to enhance capacity in the medium term are needed.
  - Investments are needed in wastewater treatment and solid waste disposal to reduce environmental stress and comply with EU targets.
  - Transport is the area where the need for action to ease congestion is urgent; costs for a sustainable solution are high and implementation would take time.

### Transport: urgency, costs, and specific project evidence
- Urgent need to ease congestion; sustainable solutions are costly and time-consuming to implement.
- Pricing actions that could help manage demand:
  - Vehicle taxes
  - Fuel taxes
  - Parking charges
- Study evidence on metro proposal:
  - Proposed metro system length: 35 km.
  - Total estimated cost: €6.2 (34 percent of 2022 GDP).
  - Estimated construction time: 15-20 years.
  - First phase: could be constructed within five to eight years and cost €3.9 billion.

### Planning and strategy
- Vision Malta 2050:
  - The planned launch of a strategic development plan (the “Vision Malta 2050”) offers an opportunity to spell out a longer-term development strategy.
  - Such a strategy would need to spell out the investment needs and costs that arise from the Vision Malta 2050 objectives.

### Policy implications and recommendations
- Prioritization and sequencing:
  - Prioritize planning ahead to sequence and finance medium-term capacity expansions in power, water, wastewater treatment, and solid waste disposal.
- Transport demand management:
  - Consider pricing reforms to manage transport demand and delay or reduce costly infrastructure needs, for example:
    - Vehicle taxes
    - Fuel taxes
    - Parking charges
- Large-scale transport evaluation:
  - Evaluate large-scale transport options (e.g., metro) against their high costs, long implementation timelines, and potential phasing (first phase estimates and timelines provided).

*Prepared by Alexander Pitt; completed on December 17, 2024.*

### Section 1

### Taking Stock of Infrastructure in Malta (Section 1)

### A. Introduction
- Between 2014 and 2019, growth averaged 7½ percent per annum.
- Per-capita income rose from 69 percent of the Euro Area average to 84 percent, and further to 92 percent in 2023.
- Output contracted by only 3.5 percent in 2020.
- Since 2014 the population has grown by one-quarter to around 563,000 at end-2023.
- Population density: 1,789 persons per km2 (and on the main island to 2,121 persons per km2).
- Tourism arrivals increased from 1.7 million in 2014 to just under 3 million in 2023.
- Eurostat population projection: population projected to grow by 28 percent by 2040 under the baseline and could approach 40 percent in a high-immigration scenario (assumes a gradually declining net immigration from 2028 onward).
- Main infrastructure segments assessed: power supply, water supply, wastewater treatment, solid waste disposal, and transportation.

### B. Power
- Peak electricity demand rose from 465 MW in 2018 to 663 MW in 2023 (an increase of 43 percent).
- Population and tourists in peak summer season rose by 13 percent over the same period.
- Mean temperature in the hottest month rose from 27.3 °C to 29.6 °C; peak temperatures rose from 34 °C to almost 42 °C over the same period.
- EV fleet: grew by around 50 percent in 2023 and more than doubled since 2021.
- Box 1: Electric Vehicles
  - At end-2023, about 1.3 percent of passenger cars were fully electric (EU average: 1.7 percent, EU median: 1 percent).
  - 7.8 percent of motorcycles were fully electric.
  - Overall, 13,000 EVs registered (more than 60 percent are motorcycles, e-bikes, and scooters) out of 438,000 vehicles in total.
  - Government target: increase EVs to 65,000 by 2030, representing about 13 percent of all vehicles; this implies annual growth of 26 percent from end-2023 (assumes population grows in line with baseline projections and the ratio of vehicles to population remains constant at 0.81).
  - Policies: large subsidies to encourage EV purchases (subsidies reduced in 2025 but remain generous), scrapping incentives for conventional cars, installing EV charging network, procuring electric buses.
  - EVs add to overall electricity demand; may not necessarily add to peak demand and can act as flexible storage.
- Current capacity and planned additions:
  - Installed capacity: generation total 777 (MW?), fossil fuels 533, photovoltaic 241, other renewable 3, import 225, total 1,002 (table format in source).
  - Additional temporary diesel power generation capacity of 60 MW installed in 2023.
  - Second interconnector of 225 MW capacity scheduled for completion in 2026.
  - Planned additions: battery storage, a waste incinerator, continued growth of renewables, further PV capacity, battery storage, and offshore wind (floating platforms due to Mediterranean depth).
- Demand projections and security:
  - Authorities project peak power demand could increase by around 30 percent by 2040 under a high-temperature and high-population growth scenario; under this scenario new generation and/or import capacity would be needed around 2033.
  - Assessments underway for post-2030 options including further interconnectivity to address the N-1 policy (power supply must be guaranteed even in the event of the failure of the largest power plant or the interconnector).
  - Need for investments in smart grids to integrate EVs as flexible storage units.

### C. Water
- Water Services Corporation (WSC) supplies water for households and services; 90 percent of WSC water is directed to these sectors.
- Current supply mix:
  - Around 36 percent of public water supply from fresh groundwater and surface water.
  - Remainder produced by reverse osmosis (RO) desalination plants.
- Groundwater and desalination volumes:
  - Groundwater abstraction relatively stable at around 13 million m3 per year.
  - Desalinated water production increased from around 17 million m3 per year during 2004-13 to around 20 million m3 in 2014-23, and 24 million m3 in 2023.
- Losses:
  - Losses reduced significantly since 2004 but still amount to some 10 percent of total water pumped into the mains.
- Future demand and capacity:
  - Baseline population projected to 695,000 by 2040 and tourist arrivals assumed to grow at 3 percent per year.
  - Estimated fresh water demand about 45 million m3 per year by 2040.
  - If groundwater abstraction declines from around 13 million m3 to 10 million m3 over next 10 years and losses contained at around 4 million m3 (loss rate below 10 percent), then desalinated water production need is about 36 million m3 per year by 2040.
  - Current RO plants capacity: 35 million m3 per year.
  - Planned investments: increase capacity to 41 million m3 in 2025 and 47 million m3 by 2028.

### D. Wastewater
- Entire population of Malta is connected to wastewater treatment plants (first country in the EU).
- Urban wastewater discharged untreated into the sea currently at 30 percent.
- Share of wastewater receiving at least secondary treatment according to EU requirements is 7½ percent (EU average: 81 percent); average pollution removal rate is 80 percent.
- Violates EU directives; current and planned measures:
  - Several wastewater treatment and sludge management facilities to be upgraded by 2027.
  - Authorities plan to disconnect farmyard waste from urban wastewater collection network to improve operational capacity.
  - Measures underway to curb seawater infiltration and stormwater runoff intrusion.

### E. Solid Waste
- Circular material rate reached 15 percent in 2022 (EU average 11½ percent, EU median 7½ percent).
- Waste generation per capita (households and service industries) reduced to around 0.7 tons by 2010 but progress stalled thereafter.
- Construction sector waste: 3.9 tons per capita (EU average 1.9 tons).
- Landfill usage around 300,000 tons/year has remained broadly unchanged; incineration and recycling have increased.
- Planned/needed measures:
  - More investments needed to cope with increasing solid waste volumes.
  - Incineration increasing; a waste-to-energy plant is being planned.
  - NRRP includes a strategy to reduce construction sector waste by increasing recycling rates.

### F. Transport
- Malta faces unique land management and transport challenges due to small size and dense population.
- Comparative spatial indicators (2022/2023/2018 data as noted):
  - Area (km2): Malta 315; Singapore 736; Balearic Islands 4,984.
  - Population (1,000): Malta 520; Singapore 6,037; Balearic Islands 1,187.
  - Population density (persons/km2): Malta 1,649; Singapore 8,207; Balearic Islands 238.
  - Road network (km): Malta 2,841; Singapore 9,644; Balearic Islands 2,155.
  - Roads/km2: Malta 9.0; Singapore 13.1; Balearic Islands 0.4.
  - Roads/1000 persons: Malta 5.5; Singapore 1.6; Balearic Islands 1.8.
  - Cars/road km: Malta 112; Singapore 693; Balearic Islands 63.
  - Cars/100 persons: Malta 61; Singapore 11; Balearic Islands 66.
  - Cars per km2 of artificially covered land: Malta 3,658; Singapore 1,736; Balearic Islands 1,724.
  - Buses/road km: Malta 0.8; Singapore 1.9; Balearic Islands 1.2.
  - Buses/100 persons: Malta 0.5; Singapore 0.3; Balearic Islands 0.2.
  - Rail network: Malta no; Singapore yes; Balearic Islands no.
  - Artificial land (cover, % of total, 2018): Malta 27.5; Singapore 52.3; Balearic Islands 9.1.
  - Residential buildings (use, % of total, 2018): Malta 17.8; Singapore 14.1; Balearic Islands 8.6.
  - Transport (use, % of total, 2018): Malta 4.9; Singapore 11.4; Balearic Islands 2.6.
- Public transport and congestion:
  - Public transport is free for residents.
  - Bus fleet: one bus for every 200 persons (more than twice as many as in the Balearics).
  - Take-up of buses increased but remains limited; travel times relatively long and buses affected by congestion.
  - Government plans: manage traffic flows across the day, introduce express bus lines.
  - Policy trade-offs: reducing car use would likely require measures to increase costs (e.g., raising fuel prices, vehicle taxes, introducing charges for public parking), which the government currently does not intend to pursue.
- Infrastructure constraints and options:
  - Road network very dense (nine kilometers of road per square kilometer).
  - Expansion of road network likely only briefly relieves congestion as car ownership and use tend to rise with more roads.
  - Rail-based public transport could limit congestion and be an attractive alternative, but:
    - A metro would require investments amounting to about 34 percent of GDP (spread over 15-20 years).
    - A tram network would be more efficient than buses but would require surface space for tracks, constrained by geography and cost.

### G. Conclusions (summary of main cross-cutting points)
- Rapid population growth and high tourist arrivals have created bottlenecks in infrastructure that need to be addressed in the medium term.
- Energy and water supply capacity currently adequate, but:
  - Investments needed in wastewater treatment and solid waste disposal.
  - Measures required to reduce greenhouse gas emissions and enhance energy efficiency and flexibility (including smart grids and storage integration).
- Transport congestion is urgent; sustainable solutions are costly and take time to implement.
- Planned and ongoing investments across sectors (second interconnector, RO capacity expansion, wastewater upgrades, waste-to-energy, NRRP measures) are critical to meet projected demand.

*Prepared by Alexander Pitt; completed on December 17, 2024.*

### Section 2

### sipea2025007 - Section 2

### Summary of investment needs and timing
- Malta faces significant investment needs in the short and medium term.
- Power and water supply capacities are adequate in the short term, but investments to enhance capacity in the medium term are needed.
- Investments are needed in wastewater treatment and solid waste disposal to reduce environmental stress and comply with EU targets.
- Transport is the area where the need for action to ease congestion is urgent; costs for a sustainable solution are high and implementation would take time.

### Transport: urgency, costs, and specific project evidence
- Urgent need to ease congestion; sustainable solutions are costly and time-consuming to implement.
- Pricing actions could be helpful, including actions on vehicle and fuel taxes, or parking charges.
- Study evidence on metro proposal:
  - Proposed metro system length: 35 km.
  - Total estimated cost: €6.2 (34 percent of 2022 GDP).
  - Estimated construction time: 15-20 years.
  - First phase: could be constructed within five to eight years and cost €3.9 billion.

### Planning and strategy
- The planned launch of a strategic development plan (the “Vision Malta 2050”) offers an opportunity to spell out a longer-term development strategy.
- Such a strategy would need to spell out the investment needs and costs that arise from the Vision Malta 2050 objectives.

### Policy implications and recommendations
- Prioritize planning ahead to sequence and finance medium-term capacity expansions in power, water, wastewater treatment, and solid waste disposal.
- Consider pricing reforms to manage transport demand and delay or reduce costly infrastructure needs, for example:
  - Vehicle taxes
  - Fuel taxes
  - Parking charges
- Evaluate large-scale transport options (e.g., metro) against their high costs, long implementation timelines, and potential phasing (first phase estimates and timelines provided).

*Source: sipea2025007 - Section 2.*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025007.pdf_