By Nazario Rodriguez Jr.
Horizon news staff

In what is seen as a move to spur economic growth in the country, the Senate on Friday May 11 has thrown its full support to the loan agreement worth five million euros ($6,800,500) to be executed between the National Development Bank of Palau (NDBP) and European Investment Bank (EIB).
President Remengesau early this month, requested the Senate to adopt a Resolution for this purpose.
Thus, Joint Resolution No. 7-70, which was jointly introduced by Senate President Surangel Whipps Sr. and Floor Leader Alan Seid was unanimously adopted.
It is to approve, authorize and ratify the authority of the President to guarantee on behalf of the government to borrow such money.
The Senate committee on ways and means and financial matters chaired by Seid in its report stated that the loan agreement and its terms are a positive step to help build a stronger economy for all Palauans.
The committee further added that the relationship between Palau and the EIB would foster the potential for future investment in Palau.
The loan would provide additional fund to help Palauans build homes and develop businesses.
Whipps thus urged the NDBP to initiate this in the soonest possible time hoping that such loan will have a low interest rate and help the Palauan people to improve their way of life personally and professionally.
For his part, Seid commended the members of the Board of the NDBP for initiating this relationship with the EIB, which is "an opportunity to advance its ability to serve the people of Palau."
According to the 48-page finance contract and the Guarantee and Indemnity Agreement between the NDBP and EIB requiring a support and backing of Palau’s full faith and credit, the loan will have an interest rate of 6.178 percent for 15 years term with a grace period of three years.
The NDBP told the Senate that the loan is not only vital for the bank to grow but also important to support private sectors and personal housing needs for the Palauan people.
The finance contract has been approved in December 2006 under the Financing Facility II and has been awaiting a guarantee of the Republic of Palau.