APS Bank has called for greater emphasis on sustainability credentials in public procurement processes, arguing that Government tenders could play a stronger role in encouraging environmentally responsible business practices.

In comments provided to WhosWho.mt ahead of the presentation of Budget 2027 on Monday 26th October, the bank suggested that sustainability considerations should feature more prominently in public procurement procedures and among companies submitting bids for Government contracts.

While acknowledging the sustainability initiatives and incentives already introduced by Government to help households and businesses reduce their environmental impact, APS Bank believes these efforts could be strengthened through procurement practices. 

The bank said placing appropriate emphasis on sustainability credentials could complement existing policies while encouraging businesses to adopt more sustainable practices.

Greater investment in renewable energy and storage

Beyond public procurement, APS Bank also highlighted the importance of strengthening Malta's energy resilience, particularly given the country's high dependence on imported energy.

Building on existing national energy policies, the bank suggested considering the gradual redirection of a proportion of current energy support towards measures encouraging renewable energy generation.

These could include both onshore and offshore renewable energy opportunities, alongside investment in energy storage infrastructure.

According to the bank, additional storage capacity could help manage fluctuations in energy supply and demand, contributing to greater long-term resilience.

APS Bank also emphasised the importance of private-sector involvement in financing such projects, given the substantial capital investment required.

It suggested that the role of private investors should be clearly defined and actively encouraged, including through public-private financing partnerships where appropriate.

Improving access to finance for SMEs

Turning to business financing, APS Bank said lending conditions are generally supportive when applicants demonstrate commercial viability and an appropriate risk profile.

Nevertheless, it acknowledged that some businesses, particularly SMEs, may encounter difficulties accessing finance when they lack sufficient collateral or operate in sectors requiring substantial upfront investment.

To address these challenges, the bank suggested exploring carefully designed risk-sharing or guarantee arrangements for eligible activities in priority sectors.

It also called for continued engagement at European level on regulatory frameworks that support responsible lending without creating disproportionate requirements.

Developing Malta's capital markets

Beyond traditional bank lending, APS Bank identified opportunities to strengthen Malta's capital markets, particularly equity investment and secondary-market activity.

The bank suggested that targeted incentives, broader institutional investor participation and measures supporting market liquidity could contribute to a more developed investment environment.

It also proposed assessing the potential establishment of a national venture capital initiative to support innovative enterprises operating in strategically important sectors.

However, it stressed that any such initiative would need to be subject to appropriate funding arrangements, governance structures and investment safeguards.

Greater clarity on occupational pensions

Pension policy was another area raised by APS Bank, particularly the anticipated introduction of auto-enrolment in occupational pension schemes.

The bank called for greater clarity regarding the implementation timeline, arguing that employers require sufficient notice to prepare operationally and account for any associated costs in their financial planning.

It also suggested exploring ways to better align long-term retirement savings with domestic investment opportunities.

Over time, and subject to appropriate safeguards, frameworks could be considered that allow a proportion of pension savings to support Malta's capital markets.

However, APS Bank emphasised that any such approach must remain consistent with prudent investment diversification, sound governance and the protection of pension scheme members.

Addressing labour shortages and administrative burdens

Looking at challenges facing businesses, APS Bank identified labour availability and administrative efficiency as areas requiring continued attention.

The bank suggested further streamlining the issuance and renewal of work permits to help businesses manage operational pressures, while maintaining the necessary regulatory safeguards.

It also highlighted the potential benefits of providing greater clarity on longer-term residency pathways for eligible third-country nationals.

According to the bank, clearer residency arrangements could contribute to greater workforce stability for employers.

Supporting first-time homebuyers

For households, APS Bank identified housing affordability as another consideration for the upcoming Budget.

In particular, it suggested additional targeted measures to support first-time buyers who face difficulties accumulating the initial deposit required to purchase a property.

Such measures could help address one of the financial barriers to homeownership, particularly for prospective buyers who may otherwise be able to manage ongoing mortgage repayments.

Balancing growth with financial stability

Overall, APS Bank's proposals focus on strengthening the conditions for long-term economic growth while addressing practical challenges affecting businesses and households.

Its recommendations span sustainable investment, energy diversification, access to finance, capital market development, pension planning, labour mobility and housing affordability.

Throughout its response, the bank emphasised that new initiatives should be carefully designed, with appropriate safeguards and consideration for their longer-term financial implications.

The bank's position is that Budget 2027 presents an opportunity to improve Malta's competitiveness and investment environment without compromising fiscal sustainability or financial stability.