The Government of Kuwait has cancelled some US$50.7 million in debt owed by Guyana from a loan taken in 1975.
This massive debt write-off is as a result of an agreement signed by Guyana’s Finance Minister Winston Jordan with the State of Kuwait on March 18, 2019.
The Finance Ministry said this debt cancellation will allow Guyana to expand its developmental agenda.
According to the Ministry, the funds saved from this agreement will be allocated to social projects within the context of the national budgets.
With the debt write-off, Guyana still owes Kuwait approximately US26.8 million.
This, according to the Ministry, will be settled through a combination of cash payments, to be made over nine years, and a debt swap arrangement, which will be worked out in due course.
Guyana’s debt from Kuwait originated from a Loan Deposit, contracted in 1975, from the Central Bank of Kuwait for US$10.3 million at the time.
The loan was for balance of payments support to the Bank of Guyana.
However, the debt accumulated massive arrears over the past four decades, at high market interest rates.
Meanwhile, only recently, Kuwait gave Guyana GYD $344 million to conduct a feasibility study for the redesign of the Belfield to Rosignol road network.
The study, which will be carried out by the Ministry of Public Infrastructure, seeks to solve the issues of deteriorating roads, poor drainage and road safety of communities from Belfield to Rosignol.
According to the Ministry of Foreign Affairs, Guyana and Kuwait established diplomatic relations in 1995.