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  • Jamaica has benefitted from close to US$3 billion in concessionary financing and balance of payments relief under the PetroCaribe Energy Cooperation Agreement since its establishment in 2005.
  • The funds assisted in stabilising the country’s foreign exchange market and balance of payments accounts.
  • The PetroCaribe Agreement was established by the Venezuelan Government under the leadership of late President, His Excellency Hugo Chávez, in response to the sudden increase in international oil prices.

Jamaica has benefitted from close to US$3 billion in concessionary financing and balance of payments relief under the PetroCaribe Energy Cooperation Agreement since its establishment in 2005.

Finance and Planning Minister, Dr. the Hon. Peter Phillips, says the funds assisted in stabilising the country’s foreign exchange market and balance of payments accounts, and were the largest such provision to Jamaica over the period, “at terms unrivalled by any source.”

He was speaking at a commemorative reception to mark 10th anniversary of the PetroCaribe Agreement’s signing on Monday, June 29, at the Petroleum Corporation of Jamaica’s (PCJ) Auditorium, Trafalgar Road, New Kingston.

The PetroCaribe Agreement was established by the Venezuelan Government under the leadership of late President, His Excellency Hugo Chávez, in response to the sudden increase in international oil prices.

Dr. Phillips said not only has its provisions to Jamaica served to safeguard the country’s energy security, but has also facilitated funds for on-lending to undertake social projects.

These projects, he pointed out, have contributed “greatly” to improving the quality of life for many persons, and advancing the country’s development.

“Areas which we have been able to finance include: the expansion of our road network; the financing of small and medium enterprises through the Development Bank of Jamaica (DBJ) and EXIM Bank; the modernisation of our port and airport infrastructure; and providing working capital to public sector entities, as well as youth employment programmes,” he outlined.

Dr. Phillips noted that PetroCaribe has undoubtedly enabled the Government of Jamaica to safeguard the welfare of the society’s poor and vulnerable, “a condition dear to the heart of President Hugo Chávez, and the Venezuelan authorities.”

In pointing out that the Administration “takes pride” in the fact that, to date, it has fulfilled all of the obligations under the agreement, Dr. Phillips indicated that “we have treated it as we have treated every other single debt obligation, and have maintained our payments, in full.”

The Minister said the Administration is also “particularly pleased” that the agreement’s provisions facilitate payments in kind, and have provided the platform for strengthening trade relations between Jamaica and Venezuela, “which…I…expect to last, well into the future.”

“I think it goes without saying that this regional agreement… represents one of the most visionary episodes in the history of our region. Not only has it been an example of the kind of cooperation between countries within the region, but I think it is a signal example of the kind of North/South cooperation present anywhere in the globe,”

Dr. Phillips said, adding that it is a “tribute to the vision of the late President Hugo Chávez.”

The PetroCaribe Energy Cooperation Agreement, formally established on June 29, 2005, is an oil alliance between Venezuela and 16 other Caribbean and Central American nations, including 15 Caribbean Community (CARICOM) member states, Haiti, and Honduras, to purchase oil on preferential payment conditions.

This system allows for oil to be purchased up front at between five and 50 per cent of market value, with a grace period of one to two years, to commence making the remaining payments.

These can be paid through a 17 to 25-year financing agreement at one per cent interest, if oil prices are above US$40 per barrel.