Building Malta’s Future: The Role of Development Finance

Leo Brincat | Chairperson, Malta Development Bank

The 2026 EY Malta Attractiveness Survey presents an encouraging picture of investor confidence, alongside important challenges for Malta’s future competitiveness. A total of 81% of surveyed foreign investors consider Malta an attractive investment destination, up from 79% last year, while 90% plan to maintain or expand their investment over the next 12 months.

Longer-term expectations are more cautious. Some 60% are certain their businesses will still operate in Malta ten years from now, compared with 61% in 2025 and 70% in 2024. Geopolitical tensions, shifting trade relationships and global economic instability may be contributing to this uncertainty.

These international pressures reinforce the need for a proactive response. Strengthening skills, infrastructure, innovation and productivity will help Malta remain competitive and resilient.

The survey identifies areas requiring attention. Skills shortages remain the greatest perceived risk to Malta’s attractiveness, cited by 63% of respondents, while only 31% say they can recruit the specialised skills they require locally. Meanwhile, 57% consider Malta’s infrastructure preparedness for population growth inadequate or very inadequate, and just 24% regard its research and innovation environment as attractive.

These challenges are interconnected. Infrastructure enables economic activity, innovation creates opportunities, and skilled people turn investment into productive outcomes.

Skills are, in many respects, a form of economic infrastructure. Just as roads and energy networks enable businesses to operate, skilled people allow them to adopt technology, improve efficiency and compete internationally.

For a small economy such as Malta’s, productivity is essential. Artificial intelligence, automation and digital solutions offer opportunities to generate greater value with available resources. Their success, however, depends on people who can apply these technologies effectively, making education, training and professional development critical.

Access to finance is equally important. Modernisation, innovation and infrastructure development often require substantial upfront investment, with returns taking time to materialise. Financing constraints can delay projects with significant long-term potential.

This is where development finance can make a meaningful contribution.

The Malta Development Bank addresses financing gaps that can hold back viable investment. Through risk-sharing arrangements, guarantees and co-lending with commercial banks, MDB helps businesses access the resources needed to invest, expand and modernise.

Its financing instruments facilitate investment in digitalisation, sustainability and business development, while its collaboration with Xjenza Malta helps innovative enterprises progress from research towards commercial activity.

MDB’s involvement in Malta International Airport’s €12.5 million airfield electrification project demonstrates how development finance can mobilise resources for strategic infrastructure. Combining financing with European funding supports modernisation, operational efficiency and environmental sustainability.

Investment in people is another priority. MDB’s student financing schemes have supported around 900 students, facilitating more than €36 million in financing for further studies. This commitment continues through StudentAssist, helping individuals pursue higher education and specialised qualifications.

These interventions support Malta’s productive capacity, from developing skills and commercialising ideas to strengthening businesses and modernising infrastructure.

Their impact also depends on wider cooperation. Educational institutions must respond to changing labour market needs, businesses must invest in their people, and policymakers must address infrastructure and long-term planning.

EY’s findings reinforce the case for quality-led development, with 84.5% of investors favouring improvements in the quality of Malta’s development. While views differ on the pace of growth, the emphasis on creating greater value is clear.

Malta’s response to global uncertainty must therefore focus on strengthening the capabilities within its control. Investment in people, technology and infrastructure can support greater productivity, higher-value employment and sustainable economic growth.

Development banking has an important role in making these investments possible and helping translate economic priorities into tangible results.

The lasting value of investment is measured by the capabilities it creates, the opportunities it opens and the strength it adds to the economy.