The Saudi Fund for Development (SFD) is providing St. Vincent and the Grenadines with an EC$135 million loan for a number of projects in the education, national security, health, youth and sports and housing sectors.
Finance Minister Camillo Gonsalves signed the agreement with Saudi officials in Washington last month, and parliament gave the green light to the accord as it debated the Natural Disaster (Construction and Rehabilitation Project) Loan Authorisation Bill.
The loan is at two per cent interest to be repaid over 20 years with a five-year grace period and was included in the EC$1.6 billion budget for 2024 that Parliament approved in January.
“That means that the first payment on the loan will be made in 2029 and the final payment on the loan will be made in 2043,” Gonsalves told lawmakers, noting that it will fund projects expected to be completed by the end of 2026.
“However, the closing date of the loan is the end of 2027,” Gonsalves said, adding that this gives “a little bit of leeway, a little bit of flex time on the back end in case things don’t proceed as quickly as you would expect them to proceed and so on”.
Gonsalves told Parliament that the money is divided into various components ranging from EC$6.8 million to EC$35.1 million and will cover projects ranging from the construction of a secondary school to the rehabilitation and rebuilding of homes damaged by the eruption of La Soufriere volcano.
Opposition Leader Godwin Friday said he hopes that projects in his Northern Grenadines constituency, will be addressed under the loan programme.
“But how the allocations are made and who gets onto the priority list, these are things that have to be more transparent because there’s a lot of people who feel that they are simply not being given the attention even though their needs are very urgent,” Friday told Parliament.
He said that while the opposition is always concerned about the effects of further borrowing for the government, “we understand this is a developing country.
Gonsalves told Parliament that the terms of the loans are different from other agreements in that Kingstown must employ Caribbean or Saudi consultants acceptable to the SFD to assist in project tendering and supervision.
Similarly, the country must employ Saudi and Caribbean regional suppliers and contractors acceptable to the fund upon the terms and conditions satisfactory to the fund.
“And clearly, that includes contractors and suppliers in St Vincent and the Grenadines,” Gonsalves told lawmakers.