Minister of Finance clears the air on MIGA financing
Minister of Finance and Economic Affairs Chris Sinckler has responded to a statement by the Leader of the Opposition Mia Mottley last weekend that the recent downgrade of the country by Standard & Poor’s and the discomfort of Barbados not having an International Monetary Fund programme had led to the two projects not benefiting from low interest rate financing.
Speaking to members of the Press shortly before entering the House of Assembly for today’s sitting, Sinckler said this simply was not true.
He also denied that Government had approached the World Bank’s Multilateral Investment Guarantee Agency (MIGA) for a guarantee for the proposed Sugar Point Cruise Terminal at Trevor’s Way, The City, and the multi-million dollar sugar factory project for Andrew’s in St Joseph.
Giving the background to the issue, the Minister revealed that Mottley, who is a practising attorney-at-law and a private development team, led by Glyne Bannister, had come to Government with a proposal for financing, which attracted nine and a quarter per cent interest.
“At the Ministry of Finance we said for a project of that nature, major infrastructural project with that tenure, we could not pay that type of money, the cost is too much. They [the private developer] had to find a lower cost solution. Their response then, let us go to MIGA, which is an insurance guarantee agency . . . They went to MIGA for an insurance guarantee on the project. MIGA said the structure of the project does not fit into the criteria which they have,” he explained.
However, Sinckler did acknowledge that the island’s recent downgrade may have had an impact in terms of their thinking and decision making on the project.
“I got a letter from MIGA and they did not say that to me, that may have been the back channel,” he said, adding that “ Miss Mottley is a lot closer than she is pretending to be”.
“The Government of Barbados was not involved in any negotiations with MIGA. Governments do not negotiate with MIGA, it is the private investor who talks to MIGA. I did not have a conversation with MIGA, I did not know what was going on. However, if MIGA issues the guarantee, they would then write to Government asking if Government had any objection with MIGA working with the developer and we would issue what is called a no objection and the process would go forward,” Sinckler added.
He stressed that it was not a case of Government going to MIGA seeking a guarantee and then being told it was downgraded by the rating agencies.