Premier and Minister of Finance Honourable Andrew A. Fahie (R1), left, met with Minister of State at the Foreign and Commonwealth Office, Lord (Tariq M.) Ahmad, right, in September 2019 to discuss the Virgin Islands/United Kingdom relationship and the Loan Guarantee. Photo: Facebook

The United Kingdom’s loan guarantee offer of £300 million has been on the table since 2017 when the two category five hurricanes, Irma and Maria, devastated the Territory. Photo: VINO/File

Governor Augustus J.U. Jaspert had said in November 2019 that the teams representing the United Kingdom and Virgin Islands' Governments have been having 'good discussions' so far with the hope of concluding shortly. Photo: GIS/File

The Premier was responding to questions during the continuation of the Fifth Sitting of the Second Session of the Fourth House of Assembly (HoA) of the Virgin Islands on Tuesday, February 25, 2020.

He said: “I can’t say anything about the plan because we are very optimistic that we would be able to work out the areas of concern in the terminology with the conditions because most of them have already been.”

He said the update on the loan guarantee was necessary because “as Premier, I have promised to keep the public informed on matters of national importance, but also given certain recent developments including reckless and misleading statements coming from certain individuals who seem to be intent on inciting the population against your democratically elected Government, and who seek to profit by sowing distrust between Virgin Islanders and their Government.”

Process ongoing  

The Premier said coming out of last September’s meeting between the VI and the UK, “it was agreed that the VI Government would submit a revised Recovery to Development Plan which was done.”

He said additional information was requested of the VI Government and this was also provided in a prompt and timely manner.

“Thus, the Government of the Virgin Islands was recently advised by the, now former, UK Minister of State for the Overseas Territories, Lord Ahmad of Wimbledon, that, having received the necessary submissions from the VI Government, the UK Government’s technical team is evaluating the Contingent Liability Checklist which will be used by Her Majesty’s Treasury to determine whether the UK would go ahead and give the guarantee for the loans. This, in layman’s terms, is equivalent to assessing the VI’s creditworthiness – our ability to meet our obligations to the population, to repay existing and new debts, among other things.”

He said it was important for citizens to understand that the Loan Guarantee is not guaranteed at this time. 

“It never was, and this is something that your Government has been saying constantly while some persons were trying to drown us out saying, “Hurry up and take the money.” There is no money sitting down idly waiting for us to just grab up and spend. What is actually before us is an offer by the UK Government that if the BVI passes the UK’s Contingent Liability tests and fulfils other stipulations, it would consider providing the guarantee for the BVI to access bank loans which the BVI taxpayers will have to repay.”

Additionally, Premier Fahie said, the possibility exists that if the UK Government is not satisfied with the BVI’s creditworthiness or with the revised Recovery to Development Plan, “they can come back and say that they are not going to give the guarantees for the loans.”

More about the Revised Recovery to Development Plan

The VI’s leader said the revised Recovery to Development Plan was a tweaked version of the original Recovery to Development Plan that was prepared by the former Administration.

He said the previous plan was “too bulky and would have definitely placed an undue financial burden on the people of this Territory way beyond what we can afford. That is why the plan had to be revised and adjusted to a scale that the people of the Virgin Islands can manage without risking our future.”

The new plan, he added, now allows for greater opportunities for local participation, and for more of the money to remain in the local economy where it will work for the benefit of the people of the Territory.

The UK’s offer of a £300 million loan guarantee has been on the table since 2017 when the two category five hurricanes, Irma and Maria, devastated the Territory.

Premier has consistently said that if the VI agrees to the loan guarantee and the loans, the VIP administration has a mission to make sure that the conditions are favourable in order to prevent fiscal deficiency.