The Caribbean Development Bank (CDB) said Friday it is providing loans of US$65 million to four shareholder governments of regional airline LIAT to assist with the purchase of aircraft in the context of a Fleet Modernisation Project.
The loan agreements provide for the loans to the governments of Barbados, Antigua and Barbuda, St. Vincent and the Grenadines, and Dominica to be on-lent to, and repaid by, LIAT over a 13 years, following a two-year grace period.
Co-financing for the project is being provided by shareholder equity contributions and from the sale of LIAT’s existing aircraft.
The loans were approved by the Bank’s Board of Directors during a meeting at its Headquarters in Barbados on Thursday.
The Fleet Modernisation Project involves the replacement of LIAT’s aging fleet through a combination of lease and purchase of aircraft; the transition costs associated with the changeover; the upgrade of maintenance facilities; and other institutional strengthening activities, the CDB said in a release.
“The project provides LIAT with the most cost-effective means of improving the reliability of its service and consequently its contribution to the socio-economic development of the region. It will have significant impact on the operational efficiency and financial performance of the airline. Realisation of these results will require the involvement of all stakeholders,” the CDB said.
The bank further said reliable and efficient air transportation is essential for connectivity, mobility and accessibility within the region, and for some of CDB’s borrowing members, LIAT provides the only air links with the rest of the region.
This project, the release further stated, is consistent with CDB’s strategic objective of supporting regional cooperation and integration and contributes to CDB’s overall mandate of reducing poverty in the region through social and economic development.