Antigua benefits from 50% debt reduction under Petrocaribe

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The Antigua and Barbuda government says, despite differing views on the amount the island owes under the Venezuelan oil initiative, PetroCaribe, it nonetheless welcomes the principle of having the debt reduced by 50 per cent, which could result in the cancellation of EC$250 million.

PetroCaribe is an energy cooperation agreement, initiated by Venezuela, to provide a preferential payment arrangement for petroleum and petroleum products to some Caribbean and Latin American countries.

A government statement said that in June 2018, the Venezuela-based ALBA Bank had written to Prime Minister, Gaston Browne, indicating that “in furthering the interests of the PetroCaribe program, the assets of the program had been transferred to the ALBA Bank to further capitalize the Bank”.

The statement said that the debt, owed by Antigua and Barbuda, was reduced by 50 per cent in the transfer, following a request by Prime Minister Browne, “and although the ALBA Bank’s calculation of the Antigua and Barbuda debt differed from the PDV-CARIBE calculation, the halving of the debt was nevertheless being pursued.”

The statement said that the matter was discussed at Cabinet, held earlier this week, and it was agreed “that the reconciliation between the two amounts will be settled in the near future, but the principle of halving the debt was agreed-to and implemented”.

“Antigua and Barbuda’s forgiveness resulted in cancellation of $250,000,000 worth of debt, reducing significantly the amounts, which might eventually have to be repaid.

“PDV-CARIBE is a Venezuelan project, which aims at bringing social programs to several Caribbean island-countries and others; it allows for the purchase of petroleum at a fixed rate, and for whatever overage to be accumulated in debt, repayable at less-than market rates.

“The amount which ought to have been paid is then turned into social programs, by the government, that are aimed at the elderly and low income households. Hundreds of families have benefitted from the PDV-CARIBE project annually for nearly ten years,” the government statement added.