Penn cautions gov’t over $100M loan spending

Eighth District representative Marlon Penn has cautioned the government against what he described as risky and poorly planned spending of the $100 million loan, warning that the territory’s fiscal space could be exhausted for decades if the funds are not managed responsibly.

Speaking during the 2026 budget debate in the House of Assembly, Penn said that how the loan is spent will determine the BVI’s ability to undertake any major capital works for the next 15 to 20 years. He stressed that the borrowing represented a rare opportunity that must be matched with careful execution and transparency.

“The people of the Virgin Islands need to understand there’s these shifts in the budget and what it means for them economically,” Penn said, adding that lawmakers must be deliberate in deciding how the loan is used. “We have to be responsible in terms of how we spend this money.”

Penn warned that under existing borrowing limits, the $100 million facility could represent the last significant source of capital financing for a generation unless the framework is changed. Any additional borrowing, he said, would be severely constrained, making it critical that the current loan delivers tangible benefits.

He also challenged what he described as an overly optimistic portrayal of the $550 million budget, arguing that underlying fiscal indicators painted a more troubling picture. “When you look on the true picture fiscally, unless we make some drastic changes, we’re going down a very slippery slope,” Penn said, pointing to rising current expenditure and strained debt-service ratios.

Drawing on experience, Penn cited the Caribbean Development Bank recovery loan secured after the 2017 hurricanes, noting that millions of dollars from that facility remained unspent while the territory continued to pay interest. “We don’t have a money problem. We have a management problem,” he stated, arguing that delays in project execution had already cost the territory millions in interest, with little to show in improved infrastructure or quality of life.

Penn said the same risks now loom over the $100 million loan, with interest costs mounting even as projects lag behind schedule. He cautioned that borrowing without the capacity to execute projects efficiently would leave residents paying for debt without seeing commensurate improvements. “When you borrow this money, you have to be ready to expend the money so the people get benefit from it,” he said.

He further urged the government to clearly explain to the public how debt ceilings had shifted and what that meant for future borrowing and spending priorities. According to Penn, the absence of a clear, documented plan for revenue generation and project delivery heightened the danger of misusing the loan.

Penn said accountability and execution must accompany any large-scale borrowing, warning that failure to do so would deepen public frustration and erode confidence in governance. “If we are not careful with this $100 million, we will mortgage the future without delivering the progress people expect,” he said.