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TCI Govt gets UK loan guarantee

A US$260 million loan to the Turks and Caicos Islands (TCI), guaranteed by Britain, has now been finalised, having reached its final approval on Thursday.

This has been announced by Governor Gordon Wetherell.

Funds can be immediately drawn down by the TCI government against the loan. 

The loan request for the Turks and Caicos Islands has been one of the central issues of local debate over how to correct the parlous state of the territory's finances.

Those in favour of the loan spoke about a free start to get the government’s financial house in order while those against questioned incurring more debt and how the money will be used.

But Governor Wetherell said the US$260 million, which will be provided by Scotia Bank, and guaranteed by the British government, will give the interim TCI administration time to tackle what he termed the dire fiscal legacy it inherited.

"We expect to be able to draw down the first tranche of funding this Friday, (February 25) and this package will allow us to refinance existing TCI debt and do so on much better terms and provide enough funding to cover budget deficits of this year and the next financial year and going forward until financial balance is restored by the end of 2012-13. This is a big step forward for us, enabling us to pay off outstanding creditors, many of whom run local business and thereby providing a boost to the economy," Governor Wetherell said.

He added that getting approval for the loan was a key milestone to reach before a date for elections can be set.

That is now expected by 2012.

Meanwhile, the TCI's interim government is also considering tax reform and a number of revenue raising measures including the introduction of Value Added Tax.

In the new budget to be presented late March, a 25% cut in government spending is also proposed.

The Turks and Caicos Islands was placed under direct rule by the British government in 2009 following an extensive corruption investigation.

(Source: The BBC Caribbean Service)

 



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