Bid opened on $150 million loan for UPM projects

(CNS): The finance ministry has issued a request for proposals (RFP) from financial institutions for a CI$150 million loan facility. The borrowing was approved in the 2024/25 budget and is to cover the shortfall between the current UPM government’s anticipated surplus and its growing bill for capital projects. A government press release said the money would be used for school building projects, roads, Cayman Airways, district infrastructure, the prison, and land purchases.

The bid was opened and posted on the government’s procurement site last week and is open until 18 October. The government has approved borrowings of up to CI$150 million during the current budget cycle. The plan is to spend $27 million in the latter part of this year and the rest next. The UPM plans to spend $172 million in 2024/25 on capital projects and equity injections, but with a surplus of just $43 million, it needs to borrow to bridge the gap.

The 2024/25 Budget documents show where the money will be spent, including almost CI$66 million on the continued expansion and construction of schools. Another $26.5 million will be spent this year and next on roads, while CI$20.4 million will be spent on parks, district upgrades, civic centres, jetties and other infrastructure and development.

Cayman Airways will receive over $21 million to keep it flying, $15 million will go to the National Housing and Development Trust for building affordable homes, and $11.6 million will be spent on the prison. The CIG has budgeted $17 million to buy more land this year and next for beach access and conservation or to protect it from development.

Despite public concerns about government borrowing, Premier and Finance Minister Juliana O’Connor-Connolly has said the money will not be used to run the government but for specific projects. In last year’s budget address, she said the borrowing was in full compliance with the Principles of Responsible Financial Management as prescribed by the Public Management and Finance Act (PMFA) and those specified in the Framework for Fiscal Responsibility (FFR).

She said that even with this additional CI$150 million loan, Cayman’s debt-to-GDP ratio will still be under 10%, making it one of the best ratios in the world. At the end of August, the public debt stood at CI$424.4 million.

The RFP for the loan is to help the CIG secure the best possible price and to promote competition in the market. The government is expected to incur more than CI$100,000 in interest and other fees. The Procurement Act requires the public tendering of this loan facility.

See the RFP on the CIG procurement site.

See the 2024/25 budget documents here.