Finance Minister Colm Imbert said he has confidence that the Tobago House of Assembly (THA) can repay a $300 million bond.
He was responding to a question in the Senate on Tuesday from Opposition Senator Wade Mark. Imbert was asked what mechanisms will be used to ensure proper accountability with Government's decision to grant approval to the THA to borrow money on the local market to finance developmental activity.
He said Cabinet's approval was sought and obtained in September 2019 for the THA to issue a bond on the domestic market in the amount of $300 million for capital works.
"The Ministry of Finance intends to work closely with the THA in executing this bond with a focus on reviewing the documentation and ensuring that the terms and conditions agreed upon are in accordance with the wider public sector debt portfolio."
He reported the THA has established a prudential borrowing limit restricting financing repayments to five per cent of the current expenditure for the fiscal year.
"The Ministry of Finance will seek to ensure that the funds are utilised for agreed projects in particular development projects that are of greatest benefit to residents of Tobago and the wider public."
He said the ministry will also monitor the administration of the bond once issued to ensure that all debt service payments are made on time and as agreed.
Mark asked if the Government will be guaranteeing these loans and Imbert replied "no". Mark then asked how the loans would be repaid but Senate President Christine Kangaloo said that question did not arise.
Imbert said the loans would be repaid from current funds.
Mark asked if Imbert was satisfied in the absence of any audited accounts since 2007 by the THA whether he was confident the assembly has the ability to engage in this exercise.
Imbert said he does not believe the statement about audited financial accounts is correct but is "grossly inaccurate" and he is confident.