$900m loan repayments to begin after 10 years

Acting Ministry of Economy permanent secretary Shiri Krishna Gounder during the press conference at Level 9 Suvavou House in Suva on Wednesday, May 05, 2021. Picture: JONACANI LALAKOBAU

Repayments for “close to $900 million” in loans taken by the Government during the COVID-19 pandemic will begin in 10 years time, says Economy Ministry permanent secretary Shiri Gounder.

He said the funds were concessional on zero interest rate and repayments scheduled for the 11th year after they were secured.

He said this during a submission of the audit report on compliance audits related to COVID-19 response.

“Generally because the interest rates are zero, these are 40-year terms, 10-year grace periods,” he said.

“Basically if you take a loan today of $100 million for the first 10 years, we do not pay the principal. The payment starts from the 11th year.

“The interest over the 40-year term is zero, so if we calculate the grant component of those loans that we got, that’s somewhere around $400 million itself.”

Mr Gounder said for the first time, they accessed a lot of concessional loans during the COVID-19 pandemic.

“And in the past, pre-COVID-19, generally all government’s borrowings from the multilateral partners and bilateral partners have been based on market-rate interest rates.

“In the COVID period, given the challenges we were facing, a number of development partners, namely the World Bank, the JICA, and now the ADB have come on board to provide extremely highly concessional loans to the Government.”

He said the real grant that was received by Fiji during the last two years in response to COVID-19 was over $800 million.

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