Senate holds special session today on US$536.4m ETON Finance loan agreement
Amid heightened public concerns and debate about the official non disclosure of the “Sovereign Guarantee” demanded by financiers of the proposed Eton loan agreement, the Senate yesterday voted unanimously to convene a special session today, June 8, to deliberate on an engrossed Bill (#4) from the House of Representatives, requesting the Senate’s concurrence to ratify the US$536.4 million loan/financing agreement between Eton Finance Ltd. and Government of Liberia.
According to the motion proffered by Grand Kru County Senator Peter S. Coleman, the Senate agreed to constitute itself into a committee of the whole to deliberate on the agreement starting at 12p.m. today in the Chambers of the Senate.
On Tuesday, June 5, the House of Representatives passed the loan agreement with a vote of over 40 members. The vote took place a day after the Lower House conducted a public hearing in the Joint Chamber of the Legislature, considered by political commentators as a mere formality.
It can be recalled that President George Weah recently submitted the loan agreement to the Legislature and was immediately hit with many questions, mainly on the legitimacy and existence of Eton Finance LTE.
Amidst controversies, President Weah informed the lawmakers that the objective of this loan is to finance the coastal corridor connection of the country’s county capitals’ road project viz construction of the Buchanan-Cestos City-Barclayville Road, the Barclayville-Sasstown Road; the Barclayville-Pleebo Road; the Medina-Robertsport Road; the Tubmanburg-Bopolu Road.
According to the plan, also to be constructed are rest stops and roadside service areas; the construction of a vocational training center in Greenville, Sinoe County; the construction of mini soccer (football) stadiums in Harper, Maryland County, Barclayville, Grand Kru County; Greenville, Sinoe County; Cestos City, Rivercess County; Zwedru, Grand Gedeh County; Robertsport, Grand Cape Mount County; and Bopolu, Gbarpolu County.
President Weah informed the lawmakers that the principal amount of the loan is payable in 15 years by level payment at an interest rate of 1.46% per annum, with a seven-year interest-free and principal-free grace period.
The contractor of the Project, according to the communication, shall be the Joint Venture Consortium (JVC) comprising MAEIL, Liberia Construction Co., Ltd., a major Chinese Engineering, Procurement and Construction Company; and subcontractors comprising Liberian-owned and operated construction and engineering companies, all to be vetted and confirmed by the Ministry of Public Works (MPW) in respect of their technical capacities.
In another development, the Senate went into Executive session yesterday to deliberate on two resolutions sent from the House of Representatives. The first resolution is known as “A joint Resolution (Leg-003/2018) of the Senate and House of Representatives of the 54th Legislature on Article 37 of the 1986 Constitution for the purpose of postponing the May 8, 2018, Senatorial by-elections in Montserrado and Bong counties.”
The other resolution, for which the Senate went into executive session, involves a joint resolution on the extension of the 2018 census.
Meanwhile concerns about the kind of sovereign guarantee requirement demanded by the creditors have remained unanswered by the Ministry of Finance, the Central Bank of Liberia as well as the Legislature which approved the loan.
The apparent refusal of these institutions have led to public speculations that the money being provided is actually drug money, portion of which the source stated may have probably been used to pay hush-hush and signature fees to the Legislators for the passage of the loan agreement into law.
This is why, according to a source with links to the Financial Intelligence Unit, government officials are refusing to disclose the kind of sovereign guarantee being requested by the lenders.
Further, according to the source, the Eton Finance company does not have a Dunn and Bradstreet rating which makes it difficult to ascertain the financial standing of the lending company.
The Dun & Bradstreet (D&B) ratings are like credit scores for businesses, giving vendors, consumers and partner businesses a snapshot of the creditworthiness of a business.
A D&B report compiles available business data to measure the creditworthiness of a company. D&B reports are like personal credit reports for businesses and are issued by the credit reporting agency Dun & Bradstreet. Companies typically check a D&B report when negotiating payment terms and lenders will also sometimes check when assessing a business borrower.
The source further points out the fact that the lending institutions do not have a Dun and Brad rating suggests that the money could very well be drug money which its providers are attempting to launder under the purported loan scheme.
This view, according to sources, is strengthened by the apparent refusal of the Minister of Finance and the Legislature to provide details about the kind and value of the “Sovereign Guarantee” it is offering to the lenders, virtually unknown and unrecognized in the world of legitimate finance.