Collin Bullock, financial secretary, is chairman of the PetroCaribe Development Fund, according to provisions in the law creating the fund. - File

Jamaica's PetroCaribe debt to Venezuela has climbed to $17.998 billion at April 30 as Kingston waits out the two-year grace period allowed by Caracas on the financing component of the agreement.

"Repayments are not yet due as we are still in the moratorium period," said the Finance Ministry in written response to Wednesday Business queries.

Jamaica in 2005 signed a renewable agreement with the Venezuelans to buy 21,000 barrels of crude and other petroleum products - expanded last year to 23,500 barrels per day (bpd) - under concessionary terms that allow repayment of 40 per cent of the bill over periods ranging up to 25 years, with a two-year moratorium, at interest rate of one per cent.

The International Monetary Fund (IMF) predicts in its last report on Jamaica that the Petro-Caribe debt will amount to $32 billion, or 4.1 per cent of GDP, by the end of this fiscal year, rising steadily to $107 billion or 9.8 per cent of GDP by 2011/12.

But the ministry has indicated that the debt would not become a charge on the budget, saying it was to be repaid by the independent PetroCaribe Development Fund (PDF).

The PDF was created by statute under an amendment last year to the Petroleum Act, with its own management structure and board.

Its offices, however, are located in the Finance Ministry, and the fund is chaired by financial secretary Collin Bullock. Its board also comprises the Cabinet Secretary, Dr. Carlton Davies, head ofthe Petroleum Corporation Dr. Ruth Potopsingh, the permanent secretaries of the energy ministry and the Office of the Prime Minister, as well as other representatives named by the energy minister.

Asked the projected value of the fund over the next three years, the ministry said "none was available for the period."

Last October, when finance minister Dr. Omar Davies first reported on the PDF, the fund was estimated at $11.5 billion.

But five months later, up to the end April, the size of the PDF had grown to $18.252 billion, a majority $16.45 billion of which was on-lent to government sponsored programmes and companies, with the sweetest terms going to Air Jamaica, whose payouts when converted topped $4.8 billion.

The fund has approved a US$32 million loan for the troubled national carrier at 1.0 per cent interest, repayable over 25 years, with a two-year moratorium on both the principal and interest. Air Jamaica also got a US$40 million loan at 3.0 per cent, repayable over six years.

Information from the ministry said the funds were "for working capital support" for the debt-ridden airline, whose accumulated losses now top US$1.1 billion.

The PDF said yesterday that the one per cent loan to Air Jamaica was equivalent to the terms of the PetroCaribe agreement, arising from the 2,500 bdp added to the agreement at its renewal last year.

But, the office of the PDF says the terms that were given on the disbursements to date are being reviewed, and may result in a "mark up on some of those arrangements."

The Sugar Company of Jamaica, whose accumulated deficit a year ago topped $9 billion, also got a hefty $3.72 billion (US$44 million) loan to finance its operations and to prepare the company for privatisation, with a similar two-year moratorium on principal and interest.

And the Airports Authority was allowed a three month US$30 million loan as interim financing at 6.0 per cent per annum.

The IMF, meantime, has referenced the activities of the fund, saying capital projects that it and other donorsfinanced - totaling about $5.5 billion in the last fiscal year - were not captured under the "normal reporting process" for spending in the budget.

lavern.clarke@gleanerjm.com

PetroCaribe Fund Disbursements

Ministry of Finance $219.7m Debt refinancing with Pan Caribbean

Ministry of Housing $3.72b Flood repairs, toll roa routes

Urban Dev Corp $428m Lift Up Jamaica job programme

Air Jamaica $4.82b working capital

Port Authority $726.5m Refinancing of existing loans

Sugar Company $3.72b working capital and privatisation programme

Airports Authority $2b Interim financing

Wallenford Coffee $540.4m working capital

JUTC $203.1m working capital

lavern.clarke@gleanerjm.com