Gozo may be Malta's smaller neighbour, but it has some big plans. Not only is the island's government spending €25 million on the first stage of its eco-Gozo sustainable development plan between 2010 and 2012, but they are also rolling out the red carpet for investors.

Gozo knows it has to compensate for the extra time needed to import and export goods from its port via Malta. So the government has put several incentives in place to make conditions more attractive for manufacturing businesses operating out of Gozo. Factory rental is much cheaper in Gozo than Malta, for example. "We also give employability special treatment," says Giovanna Debono, the Minister for Gozo. "If you are Maltese and you are investing in Malta the government will give 50 percent financial assistance to the people who create jobs for a year. In the case of Gozo, it's for two years."

Due to Gozo's geographical double insularity, attracting businesses that manufacture bulky products requiring export is not the best choice for the island and so the government is aiming to draw in foreign investors interested in ICT and telecommunications. "We are working very hard on this because we believe the people of Gozo can stand up to it," explains Debono. "There has been a great improvement in students furthering tertiary education related to ICT and finance."

Gozo is not short of skilled workers. Currently, there are more than 900 students from Gozo studying at Malta University and the main subjects of choice are financial services, ICT and management. Tourism is another sector of great importance to Gozo and the island boasts its own Institute for Tourism Studies, recently rebuilt by the government, which offers both theoretical and practical experience.

But Gozo isn't after an influx of mass tourism; rather, it is targeting niche markets such as the diving market and yachting tourism. Malta's not-so-insignificant other is also putting itself on the cruise ship map. "We don't intend to have a cruise berthing facility because it would take half the island of Gozo," says Debono. "But we did put a buoy in the centre of Xlendi bay and that is going to attract more cruise liners – in fact for the year 2012/2013, we already have about 30 bookings." Those visitors will be pleasantly surprised when they discover the unspoilt quality of the island.

And unspoilt is exactly how Gozo wishes to remain, hence the eco-Gozo plan. Malta's Prime Minister, Lawrence Gonzi has said: "We will render Gozo an ecological island – a model of sustainable development." The plan is being rolled out in three stages between now and 2020 and aims to improve Gozo in several ways. "The social aspect, the identity and culture as well as the environment," explains Debono.

In the immediate future the project will see 80 measures implemented, including projects to bring renewable energy to the island. Financing is being given to farmers to restore the old-fashioned but iconic windmills that were traditionally scattered through the fields, thus incentivising them to turn away from electricity. The government has also been busy completing an energy audit in public buildings and will install energy-saving infrastructure.

In an effort to keep its bays pristine, the island's waste water is now 100 per cent treated before being discharged into the sea. Valleys and gullies have been cleaned and now function to capture rainwater which is redistributed to farmers. And trees are being planted in four zones which will also serve as family parks.

The list of green initiatives goes on, showing how Gozo is fully committed not only to providing a healthy, stimulating and cultured environment for its citizens, but also to ensuring that both tourists and investors are treated like royalty.