The Government of Grenada has announced that it has concluded a comprehensive agreement to restructure its US$36.6 million (EC$98.8 million) indebtedness to the Export-Import Bank (EXIM) of the Republic of China (Taiwan).
This landmark Agreement, which reduces the principal outstanding on the loan by 50%, resolves Grenada’s decade-long dispute with EXIM and puts an end to EXIM’s legal proceedings in the New York Courts.
Under the terms of the Agreement, the post-haircut balance on the loan will be repayable over 15 years – including a grace period of three and a half years – at an interest rate of 7%.
The Agreement also includes a ‘hurricane clause’, which will allow Grenada to defer payments for a predetermined period should a natural disaster compromise the Government’s ability to service debt in a timely manner in the future.
Commenting on the development, Prime Minister and Minister of Finance, Dr. Keith Mitchell, said “We are very pleased that our relations with the Republic of China (Taiwan) have now been normalised through the conclusion of this important Agreement with EXIM.
“We are grateful to the Bank for recognising the extent of Grenada’s debt relief requirements, and for supporting the Government’s efforts to restore viability to Grenada’s public finances”, he added.
Taiwan moved to retrieve millions owed to it in loan payments by Grenada when a former Mitchell-led New National Party (NNP) administration severed ties with Taipei in favour of Mainland China shortly after Hurricane Ivan created havoc on the island in September.
The Taiwanese were asked to leave the island after Beijing offered Grenada a very lucrative package including the rebuilding of the national sporting stadium at Queen’s Park and promises to build thousands of houses for the island’s poor.