DBJ explains UDC relationship
Published:Wednesday | November 12, 2008 | 8:56 AM
The development Bank of Jamaica, DBJ, is seeking to explain its role in the purchase of lands at ferry in St Catherine by the Urban Development Cooperation, UDC.
The DBJ says it provided funding for the purchase based on an agreement with the UDC.
Under the agreement, the DBJ is mandated to divest the non-core assets of the UDC then recoup any loans made to the UDC for development projects from the sale of these assets.
A statement from the DBJ says the agreement is in keeping with a directive from the government early this year.
It mandated that the UDC return to its core function of planning and development of designated areas in various parts of Jamaica as established under the UDC Act of 1968.
The DBJ says in compliance with this mandate, the agency was required to, among other things, divest itself of non-core assets, the proceeds of which would be used to finance its operations on an ongoing basis.
According to the statement the UDC approached the DBJ in March 2008, with a view to establishing a partnership whereby the DBJ would divest the non-core assets of the UDC and provide it with financing to carry out its developmental activities.
The DBJ says this is in keeping with its role to provide financing for developmental projects and businesses throughout the country.
The statement further says the partnership resulted in the signing of a Memorandum of Understanding, on April 1, 2008.
The DBG says it disbursed the first tranche of a $1 billion loan, which was approved by the Ministry of Finance and the Public Service in April 2008.
To date, the Development Bank has reportedly disbursed $552 million under this facility.
The DBJ says the loan is fully secured by mortgage over several of UDC’s properties and that repayment of the loan will come from the divestment of the UDC’s non-core assets.
According to the DBJ the divestment process is well advanced as evidenced by the recent advertisement for the sale of the property known as Rooms on the Beach.
A newspaper article on Sunday had raised questions regarding the role of the UDC in the purchase of the lands housing the Hydel Group of Schools.
In that story UDC sources claimed the entity did not have the money to purchase the property and had to turn to the Development Bank of Jamaica for a loan.