Government seeking to re-negotiate World Bank multi-million loan

ST JOHN’S – The Antigua and Barbuda government says it wants to re-negotiate a US$40 million loan which the World Bank had approved for re-building Barbuda that was severely damaged by Hurricane Irma last month.

Prime Minister Gaston Browne, speaking on Observer Radio here, said the terms and condition of the loan from the Washington-based financial institution are not in the best interest of the island.

“Forty million dollars over ten years, but 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.

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

“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 request of his administration on the basis that the loans would be funding projects for the rehabilitation of Barbuda that was declared inhabitable following the passage of the Category 5 storm on September 6.

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 not only borrowing you have to have the capacity to repay. 

“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 told radio listeners.

Browne had said soon after the passage of the hurricane that more than US$100 million dollars would be required to rebuild Barbuda, home to an estimated 1 600 people. (CMC)