Government Signs Loan Agreement with FMSA
ORANJESTAD – Minister of Finance, Economic Affairs and the Primary Sector, Geoffrey Wever, recently signed a loan agreement with Fuels Marketing & Supply Aruba N.V. (FMSA), together with Managing Director Robert Henriquez, for an amount of Afl. 7 million. The loan is specifically intended to finance the demolition of the TOSI and MHI industrial towers located on the premises of Refineria di Aruba N.V. (RDA).
The Council of Ministers approved the allocation of these funds in the national budget, after which the Parliament of Aruba authorized Minister Wever to provide the loan.
This decision goes far beyond an investment in refinery infrastructure. The industrial towers have deteriorated to a point where they pose a serious risk to refinery operations. If they are not demolished on time, there is a real possibility that they could collapse, potentially disrupting the fuel supply system on which Aruba depends for electricity generation. As a result, this project is a matter of national energy security and an essential prerequisite for the continued functioning of the country's economy.
Minister Geoffrey Wever emphasized that a responsible government must act proactively whenever the nation's vital interests are at stake.
"We cannot allow Aruba to face a situation in which an industrial hazard threatens our fuel supply and, consequently, our energy production. Energy security is a cornerstone of our economy and of the quality of life of our people," Minister Wever said.
The government determined that RDA did not have the financial resources necessary to fund this urgent investment on its own. Without government intervention, RDA would have had to recover the cost of the investment by increasing the wholesale fuel margin. Ultimately, this would have resulted in higher gasoline and diesel prices for residents and businesses. Those higher fuel costs would then have flowed through to transportation and distribution costs, eventually increasing the prices of goods and services across Aruba.
By choosing to finance the project, the government is preventing the cost of the investment from being passed directly on to consumers. This decision is part of the government's policy of protecting the purchasing power of Aruba's people and limiting inflationary pressure at a time when the cost of living is rising around the world.
"Every financial decision made by the government should ultimately benefit the people. With this agreement, we are not only eliminating a risk to our energy infrastructure, but also ensuring that consumers are not forced to bear the cost through higher prices. In doing so, we are protecting the purchasing power of every Aruban family."
Unlike a conventional loan, this agreement includes strict conditions that strengthen the government's position throughout the financing period. The investment will proceed only after all technical and legal requirements have been met.
In addition, the government retains the right, should the public interest require it, to convert all or part of the loan into an equity investment in RDA. This provides Aruba with an additional instrument to protect public assets and maintain strategic oversight of critical investments.