Lilo Accepts Australian Debt Relief Offer

Minister Lilo Accepts Australian Government Debt Relief Offer

The Minister for Finance and Treasury, Hon Gordon Darcy Lilo has accepted an Australian Government debt relief offer in respect of the Solomon Islands Government outstanding debts to the Export Finance and Insurance Corporation (EFIC) of Australia.

The debt was in regard to an EFIC loan to the Solomon Islands Government in the late 1980s for the purchase of two purseiners - the Solomon Premier and Solomon Chieftain.

Minister Lilo, in accepting the Australian Government debt relief offer, said, "The offer appears very generous". Minister Lilo further stated "Considering the circumstances surrounding the initial drafting of the loans agreements which in my view were not done in good faith as highlighted in the Auditor General's Report on the loan and the March 1998 High Level Talks between the Governments of Australia and Solomon Islands, I would have expected the offer for the debt forgiveness at 100%".

Minister Lilo said "The Australian Government's debt relief package is indeed a clear demonstration of its continuing genuine commitment and support to the Solomon Islands and its full commitment to the agreed Minute between the Creditors and the Solomon Islands Government in October 2005 and on a commitment made by the Australian Government in December 2005.

Minister Lilo said it is also a demonstration of the Australian Government's confidence on the Solomon Islands Government economic reform program and achievements thus far.

Minister Lilo further encouraged the Australian Government to take more active steps to encourage other international creditors to adopt this model in settling their debts with the Solomon Islands Government".

The Australian Government debt relief offer package comprises 70% debt forgiveness on outstanding loan payments and a waiver on the 2005 and 2006 interest payments on the debt.

The debt relief offer was premised on the Minute on Restructuring of the External Debt of Solomon Islands.

This debt relief is a further reduction on the Solomon Islands national debts, estimated at over SBD15 to SBD30 million.

ENDS

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