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China agrees to write off Taiwan’s Exim bank loan to Solomon Islands
10:50 pm GMT+12, 06/10/2019, Solomon Islands

China is believed to have agreed to write off the remaining $10 million (US$1.2 million) in Taiwan’s EXIM Bank loan, which Solomon Islands obtained about two decades ago, sources have confirmed to Island Sun.
 
This was agreed during discussions in Beijing on and before 21 September this year when Solomon Islands and China signed a Joint Communique, formalising diplomatic relations between the two countries.
 
An attachment to the Joint Communique carried a list of priority items which the Government insisted must be dealt with immediately. The outstanding loan from Taiwan was one.
 
Details on the write-off are being worked out.
 
The Government borrowed the money from Taiwan’s EXIM Bank to pay for properties destroyed or damaged during the civil unrest now popularly known as the ethnic tension in the early 2000s. The total loan was estimated to be around $140 million (US$17.1 million)
 
Interest rate on repayment is said to be around 3.5 percent per annum, which many say is far too high, especially on a government-to-government borrowings.
 
Fifteen percent of the Government’s annual budget is set aside to address loan repayments as and when they fall due. The Taiwanese loan was one of them.
 
On 21September 21 this year when the Solomon Islands Government decided to switch diplomatic relations to China, some $10 million (US$1. 2 million) was still outstanding on the Taiwanese loan.
 
It is understood the Minister of Finance and Treasury, Harry Kuma, first raised the matter with the Chinese government during the ministerial visit to Beijing last month.
 
Now, Island Sun has been told China has agreed to write off the loan.

SOURCE: ISLAND SUN/PACNEWS


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