Vanuatu Gov’t Guarantees $8.2M Air Vanuatu Loan Repayment

The government of Vanuatu has signed a guarantee agreement with the Vanuatu National Provident Fund (VNPF) to resume repayments on a VUV1 billion (USD8.2 million) loan extended to Air Vanuatu. The agreement, signed on October 24, ensures the settlement of both principal and accumulated interest owed to the country’s social security fund.

Under the new terms, the government will make an initial payment of VUV250 million (USD2 million) toward the principal, along with VUV121 million (USD1 million) in accrued interest and penalties. The remaining balance of VUV871 million (USD7.1 million) is to be cleared within 90 days.

According to the VNPF’s 2014 annual report, Air Vanuatu initially borrowed VUV340 million (USD2.8 million) in 2009 and an additional VUV660 million (USD5.4 million) in 2013, both carrying 10-year repayment terms at a 6.75% interest rate. However, the airline has reportedly failed to make repayments “in recent years,” as noted in the fund’s 2023 report.

The repayment plan marks an important step in stabilizing Air Vanuatu’s financial obligations following years of mounting debt. The government’s intervention aims to protect public funds managed by the VNPF while supporting the restructuring and recovery of the national carrier.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com