Grenada debt reduced by half

Grenada’s Prime Minister Dr. Keith Mitchell.
Associated Press / Miraflores Press,Francisco Batista,HO

Prime Minister Dr. Keith Mitchell says Taiwan has agreed to reduce by 50 percent the EC$60 million owed for loans contracted over a decade.

Speaking on television recently, the prime minister, who is also finance minister, said Grenada will only have to repay approximately EC$30 million of the loans, which became an issue when St. George’s severed diplomatic relations with Taipei in 2005.

“The Taiwanese government has agreed to a 50 percent haircut. They have also agreed to look into a period of payment that will make it easy for us,” Mitchell said without providing much details with regard to the terms and condition agreed,” he said.

Last year, during his budget presentation, Mitchell told legislators that on the matter of the outstanding debt to Taiwan, his administration had reached an agreement with Taiwan on a standstill of the legal proceedings in New York.

In December, a government statement noted that Grenada had reached, in principle, an agreement with Taiwan’s Export-Import Bank on the restructuring terms to be applied to Grenada’s indebtedness to Ex-Im, regarding loans which went into default since 2004.

In 2007, the Bank sued the Grenada government in the United States District Court in New York to recover four loans that had gone in default.

The bank was seeking to recover US$21.6 million from the government plus interest payments for the loans that was used to finance construction of the first sporting stadium at Queen’s Park, the Ministerial Complex at the Botanical Gardens, the agricultural sector, and for road-construction projects on mainland Grenada and the sister isle of Carriacou.

The bank had loan the money for infrastructure projects when Taiwan was battling Chinese efforts to strip it of international recognition.

China regards Taiwan as a renegade province and has called on all countries to embrace the One China Policy.

Grenada established diplomatic relations with China in 2005 after severing ties with Taiwan.

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