US$1.2M ar­rears on Cana­dian loan

Daily Nation (Barbados) - - News -

Gov­ern­ment has de­faulted on a US$67.9 mil­lion loan, guar­an­teed by Canada, for the Bar­ba­dos Wa­ter Au­thor­ity (BWA) smart me­ter project.

It has, how­ever, “re­mained cur­rent” on sep­a­rate fi­nanc­ing backed by China.

The In­ter­na­tional Mone­tary Fund’s (IMF) made these dis­clo­sures in “sup­ple­men­tary in­for­ma­tion” which ac­com­pa­nied its re­port to the Ex­ec­u­tive Board.

The in­for­ma­tion did not im­pact the board’s de­ci­sion to ap­prove US$290 mil­lion to sup­port the Bar­ba­dos Eco­nomic Re­cov­ery and Trans­for­ma­tion plan un­der the IMF’S Ex­tended Fund Fa­cil­ity (EFF).

In a new 89-page re­port re­leased fol­low­ing the com­ple­tion of its agree­ment with Bar­ba­dos, the IMF said the gov­ern­ments of Canada and Bar­ba­dos “have been in close con­sul­ta­tion . . . seek­ing to reach an un­der­stand­ing on this debt”.

It elab­o­rated: “Bar­ba­dos is now in ar­rears to Canada. On Septem­ber 21, 2018, Cit­i­group called the guar­an­tee that had been pro­vided by the gov­ern­ment of Canada through Ex­port De­vel­op­ment Canada (EDC) on Cit­i­group’s loan to the gov­ern­ment of Bar­ba­dos. EDC ac­cepted this claim on Septem­ber 27, 2018.

Assurances

“Ar­rears on this loan for an amount of US$1.2 mil­lion had been ac­cu­mu­lated after the gov­ern­ment of Bar­ba­dos an­nounced its in­ten­tion to seek a re­struc­tur­ing of its pub­lic debt on June 1, 2018. Given these ar­rears, the ar­range­ment and the pro­posed de­ci­sion have been re­vised to re­flect the in­clu­sion of the fi­nanc­ing assurances re­view.”

The IMF said based on an “un­der­stand­ing” reached, “Canada con­sents to [IMF] fi­nanc­ing de­spite the ar­rears given that the gov­ern­ment of Bar­ba­dos has pro­vided assurances”.

These assurances were:

if this loan is re­struc­tured, it will seek to re­struc­ture other bi­lat­eral debt and debt with cred­i­torsovereign guar­an­tees on com­pa­ra­ble terms.

the gov­ern­ment of Bar­ba­dos will clear the ar­rears it has ac­cu­mu­lated on this loan, in the amount of US$1.2 mil­lion, to Canada be­fore the first re­view un­der the EFF ar­range­ment. That first re­view is sched­uled for May next year.

“It is staff’s un­der­stand­ing that the in­ten­tion of the gov­ern­ment of Bar­ba­dos re­mains to re­struc­ture this loan. The terms for re­struc­tur­ing that have been pro­posed by the gov­ern­ment of Bar­ba­dos and its debt ad­vi­sors have been re­flected in the staff’s macroe­co­nomic frame­work,” the IMF said.

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