The Government of Jamaica (GOJ) may be saving its option to borrow one per cent money from the PetroCaribe Development Fund (PDF) for the new fiscal year, as at November 30, it had not renewed its drawdown from the inexpensive source of loans.

Meanwhile, the PDF has disclosed that receipts from Petrojam — the state oil refinery which pays for imports of crude from Venezuela, and which, under the PetroCaribe agreement, remits about half to the PDF for loans to the government sector — have been declining steadily during the last three years.

Inflows from Petrojam in 2015 amounted to a total of US$ 326,051,101.74. That was 39 per cent down from 2013 when US$540,819,190.63 was received, and 31 per cent down from 2014 when US$474,044,835.30 was received.

The Jamaica Observer estimates that the decline is connected to reduced oil receipts with the significant fall-off in the price of oil over the period.

Oil was priced on the West Texas intermediate benchmark at US$36.36 per barrel on December 28, 2015, compared to US$60.70 at year end December 31 2014 and US$105.48 per barrel at December 1, 2013. Over the three-year period, the price per barrel has declined by 65.27 per cent.

It may also be connected to the formula for remittances, which sees Venezuela being paid a higher cash balance the lower the price of oil gets — with a smaller percentage being remitted to the PDF.

The GOJ cleared its slate with the PDF mid-year, paying US$1.5 billion after a historic visit to the capital markets in July where it netted US$2 billion.

Dr Wesley Hughes, chief executive officer of the PDF told the Business Observer that, of the approximately $58.3 billion currently owed to the fund, up to November none was borrowed by the Ministry of Finance and Planning (MOFP) which has historically used the fund for budget support.

Instead the debtors are the Port Authority of Jamaica with US$129.2 million owed; Airports Authority of Jamaica owing US$25.8 million; Sugar Company of Jamaica Holdings owing US$11.2 million; Development Bank of Jamaica owing US$39.8 million and $877.98 million; the Urban Development Corporation owing US$8.3 million; the Jamaica Urban Transit Corporation owing US$6.5 million and the National Road Operating & Construction Company owing US$73.2 million.

Other borrowers include the Students’ Loan Bureau which owes US$12.1 million; the National Export Import Bank of Jamaica with US$28.3 million and $600.95 million outstanding; Wigton Windfarms Limited with US$64.9 million owing and a Petrojam short-term revolving working capital facility under which US$74.6 million is owed.

The Government of Jamaica no longer guarantees loans taken by its sub-agencies, thereby reducing its debt balance under the current International Monetary Fund programme.

Hughes said that, in principle, loan tenors are informed by an assessment of the loan purpose/type, expected source of repayment, cash flows, etc… “Based upon the source of the PDF funding, loan tenors to our borrowers – including the MOFP – do not exceed 25 years.”

Interest rates charged to borrowers (outside of the MOFP) range from 2.5 per cent to 6.0 per cent per annum.

The PDF, despite its dwindling flows from source Petrojam, has an asset base of $212,595,793,302 or approximately US$1,772,636,105.00 as of November 2015.

Total interest and fees earned to November 30, 2015 was $9,563,048,452. For the financial year to March 2015 the PDF earned $16,922,395,000 (audited) in interest and fees while for 2014 it earned $13,943,774,000.

Hughes said additional earnings come from the Fund’s investment portfolio.

It expects, the PDF said, to roll out US$330.63 million in new loans in the fiscal year 2016/17 to include disbursement of US$240 million to Petrojam Limited under an existing revolving trade facility.