Barbados now has access to over US$500 million in financing from the Latin American Development Bank (CAF) following a decision by the island to acquire more shares in the institution.
This was revealed today by Minister of Finance Chris Sinckler as he led off debate on the Latin American Development Bank Amendment Bill 2017 in the House of Assembly.
While not indicating whether the country, which is facing significant financial problems, intended to seek a major loan from CAF, Sinckler said access to low-cost financing was now enhanced by the move to buy more shares.
Offering some background to the measure, the Member of Parliament for St Michael North West said in 2015 Barbados joined the bank and purchased 3, 522 common shares in CAF for a value of $50 million.
With this shareholding the island could borrow up to four times the value of its shares for domestic purposes and up to eight times for projects that improved integration.
Sinckler revealed that Barbados was given the opportunity by CAF to increase its investments in the bank by an additional 1,080 shares, bringing the total investment to US$65.37 million.
In this connection, he said the island had already borrowed $30 million for Berth 5 expansion at the Bridgetown Port, and $15 million for the purchase of new scanners for the Port and software for the Barbados Revenue Authority (BRA) to create a single platform to capture Value Added Tax, Land Tax, Inland Revenue and the Licensing Department’s revenue streams.
Moreover, he told the House the tendering process was already under way for the single tax system and the acquisition of security scanners with both projects expected to be in place by year-end.
The minister of finance further revealed that Barbados had accessed $35 million from the Latin financial institution for road improvement by the Ministry of Transport and Works, adding that additional funding for roads would come soon.
He informed the House that Barbados had been well served by its participation in CAF because of the reduced financing costs and “simpler” bureaucracy when compared to institutions like the Caribbean Development Bank and the World Bank.