BVI seeks UK exemption from debt rules to fund airport expansion

Premier Dr. Natalio Wheatley has confirmed that his government has formally asked the United Kingdom to exempt the Virgin Islands from breaching its debt ratios as part of plans to expand the Terrance B. Lettsome International Airport.

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Dr. Wheatley said he recently wrote to the UK government seeking clarity and support for the multimillion-dollar project, which he described as critical to the territory’s long-term economic growth and tourism development.

“As it pertains to what we hope to be supported on by the United Kingdom government, I’ve written to the United Kingdom government, and one of the matters that I’ve raised with them initially, as it pertains to support for the airport expansion, has to do with ratios,” Dr. Wheatley stated.

The Premier explained that the proposed runway extension would cost “several hundreds of millions of dollars,” potentially pushing the Virgin Islands beyond its borrowing thresholds. “Based on our ratios, we would fall outside of our ratios as it pertains to debt. So one thing that we are seeking from the United Kingdom is confirmation that those won’t be considered a breach of the ratios,” he said.

The BVI’s borrowing limits are guided by the Protocols for Effective Financial Management, an agreement with the UK that sets out strict fiscal rules, including debt-to-revenue ratios. The framework requires approval from the Foreign, Commonwealth and Development Office (FCDO) for any significant public sector borrowing or loan guarantees.

Dr. Wheatley noted that discussions with the UK are ongoing regarding how the protocols might be adjusted to support major infrastructure investments. “We are engaged with the United Kingdom as well as it pertains to the protocols for effective financial management and how they affect our ability to be able to engage in economic development as we seek to expand our economy,” he added.

While the Premier did not provide a timeline for the airport expansion or identify potential funding sources, he recently met with investors in the UK to explore financing opportunities in ports and infrastructure.

The Terrance B. Lettsome International Airport expansion has been a long-standing goal of successive administrations, aimed at accommodating larger aircraft and enabling direct international flights. However, progress has been repeatedly stalled by financing challenges and concerns about increasing the public debt.

The Ministry of Finance has not yet indicated how the UK will assess the government’s exemption request or when a decision may be made.