LOANS from the Chinese Government to Jamaica reached almost US$1.3 billion up to February 2017, according to data shared with the Jamaica Observer under the Access to Information (ATI) Act.
The data was shared after the Business Observer made the request about loans made to Jamaica both from the Chinese Government and its State-owned agencies between January 1, 2000 and October 31, 2021.
The data showed that over the specified period, a total of 14 loans were made to Jamaica by the Chinese. All loans were disbursed through the Export-Import Bank of China in either yuan renminbi — the Chinese currency — or US dollars. The first loan agreement was reached on April 14, 2000, and the last loan was agreed between Jamaica and China on Februray 16, 2017.
In total 1.3 billion yuan renminbi loans (approximately US$196.7 million based on 2022 exchange rate) were agreed on between April 14, 2000 and February 3, 2010 to either execute infrastructure work or projects in housing and urban development.
At the same time, the data show an additional US$1.1 billion in loans were agreed on between February 3, 2010 and February 16, 2017.
So far, six of the 14 loans have been repaid in full. The maximum repayment date for any of the loans is 2039 — 17 years from now.
Purpose of the loans
The first loan from the Export-Import Bank of China was agreed to on January 1, 2000 for a sum of 100 million yuan renminbi (US$15 million) at an interest rate of four per cent to purchase equipment and supplies for Jamaican water system rehabilitation. That loan was paid off on July 10, 2010.
The second loan was for a similar 100 million yuan renminbi (US$15 million) at a concessional two per cent interest rate for a water system rehabilitation and extension project. It was agreed on February 1, 2005, with repayment starting five years later on September 9, 2010. It was repaid in full 10 years after as per the agreement on September 21, 2010.
For the 2007 Cricket World Cup, which was hosted in the Caribbean, the Jamaican Government tapped the Chinese for a 250-million yuan renminbi (US$37 million) loan for the Jamaica cricket stadium project. That loan was agreed in May 2005. The data show Jamaica started repaying the loan in September 2010. The Government is to complete repayment of that loan in September 2025 and still owes just under 63 million yuan renminbi (US$9.5 million) currently.
For work on the Montego Bay Convention Centre in St James, a 20-year loan amounting to 350 million yuan renminbi (US$53 million) was agreed on June 1, 2007. The country has been repaying the loan since March 21, 2013. The Access to Information reply shows the final repayment date set for March 21, 2028. Jamaica currently owes about 147 million yuan renminbi (US$22.2 million)
The last loan that was negotiated in the Chinese currency was a 487-million yuan renminbi (US$73-million) loan for Jamaica economic housing project. The agreement for that loan was finalised on February 3, 2010. Repayment started on September 21, 2015. Only 300,000 yuan renminbi (US$45,000) of that loan was not disbursed. It is due for full repayment in September 2030 with the Government owing 282.5 million yuan renminbi (US$42.75 million) currently.
The next set of loans were negotiated and disbursed in US currency.
Two loans were negotiated and agreed upon in US currency on February 3, 2010, the same day the loan for the economic housing project was agreed on.
The first of those two loans, amounting to US$58.1 million, was negotiated to finance the Palisadoes shoreline protection and rehabilitation works project. That loan is due for full repayment in January 2026. Repayment started in early 2014. The Government currently has US$20.9 million outstanding on that loan.
For the work that was done on improving the road network, especially in the vicinity of Three Miles, St Andrew, and the Mandela Highway, a loan of US$340 million was negotiated.
Mike Henry, the minister of transport and works at the time, labelled the project as the “largest and most comprehensive single infrastructure programme to be implemented in Jamaica”. The repayment of that loan started January 2016 with the expectation based on the agreement that it will be fully discharged by July 2025.
Another US$300 million was borrowed three years later for the major infrastructure development project (MIDP) with the Government repaying since January 2018. The loan is to be repaid in full by January 2028.
The last of the big loans taken from the Chinese is US$326 million for the Southern Coastal Highway Improvement Project, which had an agremeent date of February 2017, according to the ATI document. Up to the end of October last year, US$286 million of the sum was disbursed. While that fund was originally earmarked for the expansion and rehabilitation of roads and bridges from Harbour View, St Andrew to Portland, it was later divided and some of the funds used to finance expansion work on the PJ Patterson Highway from May Pen, Clarendon to Williamsfield, Manchester.
Smaller loan sums were taken for things like public sector efficiency programme. The original loan amount from the Chinese for that project in February 2014 was US$11 million, but was later revised to US$8.13 million. The repayment, which started in August 2019, is scheduled for completion in February 2039. US$4.8 million of the total loan remains oustanding.
The Export-Import Bank of China also provided four loans valuing US$58.8 million between 2004 and 2006 for the design and construction of gantry cranes, for the purchase of shore-based gantry cranes, and other goods and services for the port of Kingston. Those loans have been repaid in full with the last payment made in January 2014.
Off all the loans received from the Chinese between 2000 and 2021, the Government still owes 492.3 million yuan renminbi (US$74.45 million) and US$469.4 million — roughly 40 per cent of the original loan amounts.
(Please note: All conversions from yuan renminbi to US dollars were done using today’s exchange rates and the loan amounts expressed in US dollars would have been different at the time of agreement or disbursement.)