Grenada to Pay $140 Million in Debt to Venezuela & Resume PetroCaribe Agreement

Caracas, October 2, 2022 (OrinocoTribune.com)—On Tuesday, September 26, the government of Grenada announced that it has already begun preliminary talks with Venezuela to pay off a debt of more than $140 million and resume the PetroCaribe agreement, according to Caribbean news reports.

Petrocaribe is an oil alliance consisting of 18 Caribbean countries that was founded on June 29, 2005 in Puerto La Cruz, Venezuela, by former President Hugo Chavez. Venezuela offered preferential payment for oil shipments to its members with an upfront payment of 5-50% of the bill and payment of the remaining balance in a period of 17-25 years at 1% interest, if oil prices were above $40 per barrel.

PetroCaribe had been part of the first “pink tide” wave in Latin America seeking to achieve post-neoliberal development in the region and South-South cooperation. In 2013, PetroCaribe established links with the Bolivarian Alliance for the Americas (ALBA) aiming to go beyond oil trade by promoting economic cooperation, however, the Obama and successive US administrations acted decisively to undermine the alliance and push Caribbean countries to exit the deal that was mainly benefiting themselves.

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With the illegal sanction policy launched by Washington against Venezuela, together with the decrease in oil prices, the alliance lost momentum. However, in recent months, especially after the US and European sanctions on Russia which impacted oil prices and availability, many countries in the region now have their eye back on Venezuela.

Grenada’s Foreign Minister Joseph Andall said in a government press conference that: “We are also indebted to Venezuela through the PetroCaribe agreement and initial discussions have taken place regarding a mechanism to pay off that debt.”

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Andall added that: “Venezuela was another [country] with whom we had fruitful bilateral relations with. They indicated that soon they will be resuming the PetroCaribe agreement. This could not have come at a better time, considering the generally high price of fuel on the international market.”

According to the latest publication of the Grenada Public Debt Bulletin, PetroCaribe’s debt is 11.5% of the island’s Gross Domestic Product (GDP).

“This includes the debt obligations of PetroCaribe, which was just over $140 million,” explained the person in charge of the foreign affairs portfolio of Grenada.

Conversamos con el canciller de Grenada Joseph Andall, a quien felicitamos por su reciente nombramiento y por la victoria del Congreso Nacional Demócratico (NDC), ambos reafirmamos el compromiso mutuo de fortalecer las relaciones y esquemas de cooperación en esta nueva etapa. pic.twitter.com/IDEZx1hTp7
— Carlos Faria (@Fariacrt) September 24, 2022

At the end of the first quarter of 2022, apart from three State-Owned Enterprises (SOE), the total debt stock (unaudited) of the SOEs was approximately EC$466 million (14.3% of GDP): “This is inclusive of the debt obligations of PetroCaribe, which was EC$372.1 million (11.5% of GDP).” The publication explains that domestic and external SOE debts were 60.6% and 39.4% respectively at the end of the first quarter of 2022, as reported by local website Now Grenada. EC is the abbreviation for Eastern Caribbean Dollar that has an exchange rate with the US dollar of 0.37 EC for one US dollar.

On September 23rd the Venezuelan Minister for Foreign Affairs Carlos Faría met with his Grenadian counterpart Joseph Andall in New York within the framework of the 77th United Nations General Assembly, as reported by the Venezuelan Ministry for Foreign Affairs.

The Venezuelan ministry highlighted the friendly relations between both countries since 1977, and the solidarity of Grenada within the Organization of American States (OAS), expressed on June 5, 2018, by refusing to vote on a resolution not to recognize the victory of President Nicolás Maduro during that year’s elections. The positive perception that Grenadian authorities have of PetroCaribe and ALBA-TCP was also remarked upon.

Joseph Andall was recently appointed as foreign affairs minister of Grenada, after the victory of the National Democratic Congress (NDC), in the general elections held last June. NDC is a center-left political party led by current prime minister Dickon Mitchell as of October, 2021.

Orinoco Tribune special by staff

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