US$20 million low interest loan from Venezuela

AS 2010 progresses, financial support from Venezuela continues to be one of the main stays of the Vincentian economy.{{more}}

As recent as Tuesday, April 6, 2010, the Government of St.Vincent and the Grenadines received US$20 million from the National Development Fund in Venezuela at an interest rate of 2.6 per cent.

On that day, Prime Minister Ralph Gonsalves also signed a guarantee for US$18 million on behalf of St. Vincent Electricity Services Ltd. (VINLEC) for the further development of the Lowmans Leeward Power Plant at an interest rate of 4.5 per cent.

Quoting from the agreement, Gonsalves said the Government will draw down US$12 million and leave the additional US$6 million for further expansions. US$6.5 million will arrive this week, a further US$3 million on July 15, 2010, and an additional US$2.5 million by October 5.

“Where are you going to get that kind of money elsewhere? I must un-sign ALBA? I must un-sign Petro Caribe?” Gonsalves asked.

Regarding the US$20 million which was advanced as a preliminary sum to St.Vincent and the Grenadines’ account at the Eastern Caribbean Central Bank as part of the US$50 million this country is expected to receive from the ALBA group of institutions, Gonsalves disclosed that US$5 million will go to the International Airport project immediately, while some funding will go towards the Bridges, Roads and General Services Authority (BRAGSA) and the rest to pay some developmental expenses.

According to Prime Minister Gonsalves, the first portion of monies should have been received earlier this year, but there were a number of administrative hiccups.

He disclosed that the President of the ALBA bank, along with a delegation, visited St.Vincent and the Grenadines to bring the instruments of ratification for the bank, which would allow this country to draw down an additional US$30 million.

Gonsalves noted it’s the money from the various institutions from Venezuela, namely Petro Caribe or ALBA, that contributed to significant inflows needed to continue to provide the backing for St.Vincent and the Grenadines’ Eastern Caribbean dollars in circulation.

The Prime Minister expressed that this is very important in providing for the country’s economic well being, in addition to providing funds for the development of Vincentians.

“We run the money through the Central Bank, the US dollars, and we get the EC dollars,” said Gonsalves, as a press conference held on Monday, April 12, 2010.(HN)