10 August 2018

Liberia: Controversial U.S.$536 Million Loan Still Subject to Scrutiny Despite Signing Into Law

Monrovia — When the news of ETON PTE Finance Ltd. Executive Director, Dr. Yungseoung Jin's, arrival in Monrovia hit the public Wednesday morning, aspirations were that all was set for the commencement of disbursement of the US$536 million loan that would see the dream of connecting southeastern Liberia via a road network come true.

Loan Under Scrutiny

But that is not the case. Finance and Development Planning Minister, Samuel Tweah, at a press conference Wednesday disclosed that the government has reinitiated series of meetings with the ETON aimed at bringing the loan to fruition.

"We are still subjecting Eton to scrutiny, as we speak right now the international financial people are doing their due diligence; so we are taking the Eton route, we're moving with the framework with the World Bank as well; the goal is to get US$1 billion in financing."

Minister Tweah said the government has received several queries on the controversial loan agreement which was speedily passed by the Legislature and signed by President George Manneh Weah into law on June 15, 2018.

Disbursement for the loan, according to the agreement, ETON should commence 50 banking days after the agreement had been signed by the President and a sovereign guarantee made available.

However, the Finance Minister's press conference on Wednesday suggests that though the government remains hopeful of light at the end of the tunnel, expectations on the loan might not be realized anytime soon.

"There has been legitimate concern about either the viability about Eton or the legitimacy of Eton. We received all of those queries and we conducted our due diligence and we are still in the stage of conducting our due diligence. So, due diligence is not an event; it is a sequence of things you can do," Min. Tweah told journalists.

"There are series of steps that need to happen in the realization of the loan agreement and the Eton delegation is here to begin the process," he added.

Addressing Int'l Partners' Concern

Minister Tweah admitted that Liberia's international partners raised concerns over the legitimacy of the US$536 million loan which comes with an interest of 1.46 percent, but their concerns led to the creation of a framework that would verify Eton's viability and the ability to provide clean money.

According to Tweah, Eton's money would be transferred under the international financial system, thereby, giving opportunity to Asian and European Banks and the federal reserve system to verify the legitimacy of the funds.

"We can subject this framework to the World Bank, African Development Bank and Liberia procurement rules and processes and the kind of supervision that the region and the international community demand," he said.

He said Eton would need all guarantees and go through a complex structure to access the fund.

"The notion that this is off the table is not true; that's why the delegation came to assure us that we're going to get the money; but as a government also, we're very critical going every next step of the way to ensure bringing our international partners in this because if it succeeds at the end of the day, we are putting together a financing framework for the President's road infrastructure."

ETON in Town

Min. Tweah told reporters that ETON delegation presence is an opportunity for them to answer all the critical questions, such as the source of the money he wants to loan to Liberia and its good standing with international financial procedures.

He said now is the time for Dr. Yungseoung Jin to say to the Liberian people what ETON is, where its offices can be located and how it generates its funds to loan those in need anywhere around the world.

"We have been told by our partners, including the World Bank, that if ETON can clearly state and authenticate its good standing, then the deal we are about to get into with them is a great concession deal. All that is needed is the cleanliness of the money that is coming from ETON," he noted.

Targeting US$1 billion Loan

The government is looking up to a billion dollar financing agreement for President Weah's projects. The EBOMAF loan was expected to compliment ETON's to hit the target. However, not much information has been provided by the government since the signing of the controversial EBOMAF agreement.

Helping out in the midst of confusion, the World Bank offered to help Liberia secure US$500 million loan to be paid over a concessional period at the rate of 0.5 percent, according to Information Minister Lenn Eugene Nagbe.

On Monday, the World Bank, responding to a FrontPageAfrica inquiry, acknowledged that it has offered to support the government of Liberia in its effort to explore potential sources of funding for the development of roads in Liberia.

While making no mention of a timeframe, the bank said: "The Government expects to raise close to US$500 million with potential contributions from development partners, including from the World Bank Group; and by mobilizing private financing through guarantees and other instruments. The government is already working with the World Bank on developing a similar financing model for the proposed South-East Corridor Road Asset Management Project (SECRAMP) to support the construction of the Ganta - Tappeta - Zwedru road."

The bank added that over the past decade and a half, it has mobilized more than US$450 million under the Multi-Donor Trust Funds and the International Development Association (IDA), an affiliate of the World Bank Group, to finance the rehabilitation of about 500 kilometers of paved roads, including the Cotton Tree-Bokay Town-Buchanan road, the Monrovia city streets, the Monrovia-RIA road and the Monrovia-Gbarnga-Ganta-Guinea Border road.

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