By Davion Smith, BVI News Journalist
The British Virgin Islands will spend five times as much on loan repayments if it refuses the United Kingdom’s £300 million loan guarantee and borrows from the BVI Social Security Board (SSB).
That is according to Communications and Works Minister, Mark Vanterpool.
Some legislators who are opposed to the UK’s offer are suggesting that the BVI borrow from local lenders such as the SSB. But, Vanterpool said borrowing locally will cost the BVI several unnecessary millions.
While crunching numbers in the House of Assembly on Friday, Vanterpool said government has pre-hurricane borrowings of roughly $125 million and is currently paying approximately $25 million yearly to settle that debt.
He said if the BVI accepts the UK’s loan guarantee, the territory would be able to receive loans at a one percent interest rate, which would be considerably cheaper than that annual $25 million price tag the BVI is currently paying.
The minister said if the BVI borrows another $125 million for hurricane recovery; with backing from the UK, the territory would only pay $23,792,000 interest over a 25-year repayment period.
Without the UK’s guarantee, the BVI would have interest rates of at least 3.5 percent, Vanterpool said.
“If we borrowed it at $3.5 percent from the Social Security Board or some other lending institution, we would have paid $129,000,212 in interest. That’s the difference between a one percent rate and a 3.5 percent rate,” Vanterpool reasoned.
Do what the UK says, locals need help
The minister said the BVI should be happy to accept the UK’s conditions, given that the territory has the opportunity to save millions.
He then assured that government does not intend to borrow the entire £300 million (roughly US$400,000,000) that it can receive with a guarantee from the UK.
“The people need help … We got to do what the lender is saying we must do. What’s wrong with us? When the bank give you the money, you got to do what he tell you to do. What style we cutting? How we get so bright?” Vanterpool asked while addressing legislators who are opposing the UK’s offer.
So far, Opposition member Julian Fraser and government backbenchers Marlon Penn, Delores Christopher, Alvera Maduro-Caines, and Melvin ‘Mitch’ Turnbull have all objected to the UK’s offer.
They said they don’t agree with the Recovery Agency and Board, which are conditions of the UK’s offer. The BVI is being told to implement the Agency, which will then have full control over how recovery funds are spent.
Legislators are currently locked in a heated debate in the 13-member House of Assembly on whether the BVI should implement the said Agency.
The legislators must vote whether to implement the Agency before March 31.
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