§ Mr. Walters
asked the Secretary of State for Foreign and Commonwealth Affairs what arrangements exist for part of the United States of America $23 million loan from the World Bank to the Caribbean Development Bank to be made available for on-lending to British dependencies in the Caribbean.
§ Mr. Neil Marten
The World Bank loan is available to finance investment projects in any of the CDB's regional member countries, including those that are British dependencies.
Before a sub-loan can be made to a British dependency, Her Majesty's Government are required to guarantee to reimburse the World Bank in full in the event of any default on the repayment. Such guarantees are given under section 8 of the Overseas Development and Co-operation Act 1980. An agreement declaring our intention to guarantee such sub-loans, subject to certain conditions, has recently been concluded with the World Bank. We have in turn been given an undertaking by the CDB that they will reimburse Her Majesty's Government in the event of a guarantee being called.
There have been no proposals so far for sub-loans from the World Bank loan to British dependencies. The House will be informed as soon as any guarantees for specific projects have been agreed.