Thu | Nov 23, 2017

Antigua wants better terms for Barbuda rebuilding loan

Published:Wednesday | October 18, 2017 | 12:00 AM
:In this Thursday, September 7, 2017 photo, damaged structures in Barbuda attest to the devastation wreaked on the tiny island by Hurricane Irma.

The Antigua & Barbuda government says it wants to renegotiate a US$40-million loan which the World Bank had approved for rebuilding Barbuda that was severely damaged by Hurricane Irma last month.

Prime Minister Gaston Browne said the terms and conditions of the 10-year loan were not in the best interest of the island.

" ... As far as we are concerned, the term is too short and we have asked them to reconsider and perhaps consider up to 20 years with a five-year moratorium," Browne said on local radio station Observer.

Browne, a former banker, said that his government is also seeking the World Bank to reduce the interest rate from the 3.5 per cent to 4 per cent range to 1 per cent.

The request is less than half the estimated US$100 million that the prime minister said would be needed to rebuild the island of Barbuda, home to an estimated 1,600 people. Barbuda was declared inhabitable following the passage of the Category 5 storm on September 6.

"We have asked them to reconsider the terms and they said they will put it to the board and will get back to us," Browne said, defending the size of the loan request by his administration on the basis that the debt would have to be repaid.

He said the funds would also be going into non-revenue earning projects.

"If it were grants, we would push for some more, but we have to be careful in terms of how much we borrow, because ... you have to have the capacity to repay," he said.

"What we are saying with this particular loan is that most of the funds will be going into non-revenue generating resilient infrastructure. For example, in Barbuda we will be putting the lines underground, we will be replacing all of the wooden posts with concrete posts and, technically speaking, they will not be creating any funds, any revenue, so again we have to make sure we do not over-burden the Treasury, because at the end of the day we have to pay it back," Browne said.

- CMC