Minister of Science, Technology, Energy and Mining, the Honourable Phillip Paulwell has refuted media reports of plans by the Government of Venezuela to increase the interest rate on loans provided under the PetroCaribe Agreement.
“We have been in contact with the Government of Venezuela through our Embassy in Caracas, and can confirm that no such decision has been taken,” Minister Paulwell said.
Recent reports have suggested that PDVSA, the Venezuelan state-owned oil company would, starting in October, increase the interest rate on oil purchases by countries signatory to the 2005 PetroCaribe Agreement.
“We have been assured by the Venezuelan Foreign Office that any such action, if contemplated, would be discussed bilaterally or at the Summit of Heads prior to implementation,” Minister Paulwell added, pointing out that no such plan was put forward at the most recent Summit of PetroCaribe Heads of State/Government held in Nicaragua in June this year.
Jamaica was one of the original signatories to the 2005 PetroCaribe Initiative, a multilateral agreement between Venezuela and a number of Caribbean countries created by former Venezuelan President, Hugo Chavez. Under the PetroCaribe Agreement, member states are allowed a deferred financing mechanism, through which a percentage of the value of each invoice for petroleum products purchased from Venezuela is made available to their Governments as a long term concessionary loan.
Jamaica’s participation in the initiative is guided by the 2005 Jamaica-Venezuela bilateral PetroCaribe Energy Cooperation Agreement, under which loans are repayable over 25 years, at an average interest rate of one percent (1%) per year. To date, over $2.4 billion in financing has been provided in the form of long term loans, based on oil purchases from Venezuela since 2005.