Brussels zooming in on EU funds allocated for Minister Anton Refalo’s hotel

The European Commission is expected to conclude its investigation into how Minister Anton Refalo’s family was allocated some €270,000 in EU funds to turn a once illegal ODZ building on the outskirts of Qala into a so-called “yoga boutique hotel”.

The Shift has learned that the probe, conducted by the Directorate General for Regional and Urban Policy, a body responsible for the implementation of EU regional and urban policy, has made significant progress.

The investigation was launched following an investigative story by The Shift in 2023, which revealed how a company owned by Minister Refalo’s wife, Michelina, was awarded a substantial amount of EU funds from Malta’s allocation to establish a private boutique hotel.

This discovery raises concerns about the fairness of the allocation process, given the direct involvement of Minister Refalo’s family in the project.

Brussels started its investigation after receiving several official complaints on possible abuse of EU funds, both by private individuals and the ADPD.

According to the original description of the project, the minister’s 16-bed hotel, with views of Daħlet Qorrot Bay, was to offer a unique experience, including lessons and experiences in yoga and meditation.

Contrary to the original vision, The Shift has learned that the hotel, managed by Andre Refalo, the minister’s son, is just another hotel among the many built in Gozo in recent years.

According to hotel booking websites, the minister’s hotel, l-Eremita, is currently attracting clients ready to pay some €300 a night, promising them a luxury service.

Officially, the hotel is owned by L-Eremita Company Ltd, with the minister’s wife being the sole director.

The European Regional Development Funds (ERDF) were allocated to the minister’s family in 2020 by national authorities who manage the funds on behalf of the EU.

Refalo and his wife acquired the sprawling 2,000-square-metre property in the early 1990s when it consisted of just a small agricultural building on the outskirts of Qala.

Over the years, the building was expanded in a piecemeal fashion, mainly through repeated illegal interventions, later sanctioned by the Planning Authority under both administrations.

The minister and his wife were able to secure the EU funds, which covered 80 % of their project, only after receiving approval from the Planning Authority. This approval effectively legitimised years of illegal construction, highlighting potential regulatory oversights in the process.

Although the Environment and Resources Authority (ERA) had insisted that the ‘illegal’ building should not be given a permit, the Refalos got what they wanted.