Jamaica close to concluding PetroCaribe supply deal

The government of Jamaica is close to concluding a supply contract with Venezuela to use cement exports to meet some debt repayment obligations under the PetroCaribe agreement.

Under the Trade Compensation Mechanism of the PetroCaribe energy cooperation agreement, Jamaica is allowed to settle a portion of its oil debt to Venezuela through the export of goods and/or services.

According to a report by the Economic Intelligence Unit (EIU), the cement agreement would entail initial sales of 100t of clinker, worth an estimated US$8m-US$9m (payments to the company, in turn, will be made by the government in local currency). This could rise to 400,000t in the subsequent years, .

Although the cement supply agreement by itself will not have any material impact on Jamaica's balance of payments in the short term, "over the medium term there is potential for such arrangements to ease Jamaica's external debt-servicing burden," the EIU report noted.