As government continues struggling to access money from the $65.2 million Rehabilitation and Reconstruction Loan from the Caribbean Development Bank, leaders still have not been able to secure further recovery funding under the £300 million loan guarantee offered by the United Kingdom, Premier Andrew Fahie told the House of Assembly on Friday.
In response to a question from Opposition Leader Marlon Penn, Mr. Fahie said that no additional loan funding for disaster recovery has been acquired outside of the RRL; three $750,000 CDB “immediate response loans” for the August 2017 floods and hurricanes; and a “policy-based loan” from the CDB that he didn’t explain.
He also outlined the steep requirements to access the UK
loan guarantee, an assurance that the UK would assume the VI’s recovery-related debt obligations if the territory defaults.
The guarantee was accepted in March 2018 by the HOA
when it passed the Recovery and Development Agency Act after a contentious debate.
But so far the VI has not actually accessed any loans
under the guarantee, and Governor Gus Jaspert said in
March that the first step is creating a detailed plan to submit to the UK government.
Asked by Mr. Penn (R-D8) about any progress made in accessing the guarantee, the premier responded that in
November 2018 the territory obtained a review of all existing public sector loans, and in February Cabinet passed the required Medium Term Fiscal Plan, including a debt sustainability analysis. In addition, he explained
that the Ministry of Finance has requested that state-owned enterprises and statutory bodies submit quarterly financial reports to give government a better idea of its debt position.
The ministry also continues to meet with the “UK-appointed debt advisor” and representatives from the RDA, the Foreign and Commonwealth Office and the Governor’s Office on the status of the guarantee, according to the premier.
“Those are the works that have been done thus far,” he said.
Meanwhile, the VI has been struggling to access the
$65.2 million RRL, the main recovery loan that it did manage to acquire. As of December, the government had drawn down $15 million from the CDB loan and was paying interest on it, but only $2.4 million worth of initiatives had
been charged to the loan at the time because of the lengthy CDB loan process, then-Premier Dr. Orlando Smith told the HOA at the time.
On Friday, Mr. Fahie criticised Dr. Smith’s administration
for the lack of progress.
“I might add that the CDB loan was received — or the approval for it — from December 2017,” he said. “I remember being in the opposition and telling them that they were not ready for that loan; do not take it out. For the whole of 2018 nothing substantial was done to get the loan going until November 2018.”
In February 2019, he said, the CDB conducted a “due-diligence” visit to facilitate the transfer of loan funds to the
RDA, but he noted that there is disagreement about how much the RDA will get.
“The RDA are saying the funds for the loans is under the
RDA and there’s a dispute whether the RDA will get 80
percent,” he said. “That is something I’m trying to sort out in the best interests of the people.”
An update provided by government in March suggested
that nearly $4.6 million worth of contracts had been signed under the loan as of February. Another bulletin published late last month detailed a handful of “upcoming tenders,” but unlike the previous reports, which were meant to be published monthly, it did not include an update on the dollar amount or number of contracts signed.