Ling-Stuckey said this involves a deal by the former government that saw them agree to a K375 million one off payment, if Petromin (now Kumul Minerals) failed to service a BSP loan for the Solwara-1 deep sea mining venture.
“The National Executive Council recently, had no choice but to restructure the debt, which has been transferred from the former Petromin subsidiary, Eda Kopa, to the Department of Treasury.
“Interest on the original loan from BSP was 7.75 percent annually, or the equivalent interest payment of K2.4 million every month until April 2021, when the entire principal and interest were to be repaid. An additional agency fee of US$100,000 a year was to be paid in quarterly instalments,” he outlined.
“The loan was formalised in early 2014 when the Government was flush with cash from high commodity prices and the PNG LNG Project, giving the government its single biggest annual revenue boost ever.
“Nevertheless, the then government agreed on a ‘bullet’ repayment for the entire loan six years later in April that year in the event Eda Kopa was unable to service this debt. This became inevitable after the Nautilus deep sea mining project collapsed,” Ling-Stuckey stated.
“The Marape-Basil Government has now restructured this painful K375 million loan at a lower interest rate of 5.15 percent to be amortised over a ten-year period."