Curaçao’s refinancing of COVID-19 loan not yet final: Pisas sets new conditions

October 11, 2023  –THE HAGUE – Curaçao’s COVID-19 loan refinancing has not reached a final agreement, as it now appears. State Secretary for Kingdom Relations Alexandra Van Huffelen announced that the Pisas cabinet has signed the loan agreement but has added three supplementary conditions. The Hague has no issues with two of them, while the third is subject to further discussion, described by Van Huffelen as an “interpretation issue.” 

Pisas has also stipulated that the Council of Ministers must give their approval, and possibly the Parliament of Curaçao may also need to have their say. If the parties fail to reach an agreement, the loan of over 900 million guilders becomes immediately callable. 

Concerning Curaçao, Van Huffelen states in her letter to the Dutch Parliament: 

“As I have also explained in my letter of October 9, the absence of an agreement on ENNIA results in my offer to Curaçao of a short-term refinancing at an interest rate of 5.1%. Similarly for Curaçao, once a solid agreement is reached regarding the ENNIA solution, a long-term refinancing can be offered at the interest rate paid by the Netherlands with a minor risk premium. 

I sent the loan agreement to Curaçao for this purpose on October 6. On October 10, I received a signed version of this loan agreement from Curaçao. However, Curaçao has attached three conditions to this signature. I can agree to two of these conditions. They relate to the approval of the loan agreement by Curaçao’s Council of Ministers and, if necessary, the Estates (Staten). I consider these to be conditional clauses in the loan agreement. This means that if the mentioned approval is unfortunately not granted, the loan agreement will be canceled, making the entire loan immediately callable. The third condition from Curaçao pertains to the content of the loan agreement. I have presented my interpretation of this condition to Curaçao and requested their confirmation. Once this confirmation is provided, there will be a final agreement with Curaçao on the loan agreement. 

Should an agreement be reached regarding a financial sound and sustainable solution for the issues at ENNIA, which is assessed as such by the Netherlands, a new loan agreement can be established for long-term refinancing. Following previous agreements, the Netherlands will offer that loan with no repayments, featuring loan tranches with different maturities to achieve a consistent repayment profile for Sint Maarten. The interest rate will be equivalent to what the Netherlands is paying in the market at that time, with a risk premium of 0.2%.” 

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