GSB, three lenders sign water-project loan contracts
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The Government Savings Bank (GSB) will finance 50 per cent of the government's Bt350-billion water resources management project, with Bangkok Bank, Krungthai Bank and Kasikornbank supplying the remaining credit.
The banks signed loan contracts with the Public Debt Management Office (PDMO) yesterday.
The average lending rate remains at 3.8 per cent.
Chularat Suteethorn, director-general of the PDMO, said loan disbursements would be timed with the phases of the five-year project. The Budget Bureau has already sent the project details to the PDMO. Not much will be disbursed in the initial phase, while more would come in the middle and last phases.
“Each contract we signed will specify our disbursement by year. Banks know the disbursement schedule and will prepare funds for us. Borrowing costs will be incurred when we disburse the loans,” he said.
The PDMO has already released about Bt10 billion. A Finance Ministry source said the ministry was concerned about a delay in disbursement or no disbursement in some contracts, given the likely difficulties in project implementation.
Although individual loan contracts do not specify fines in the event that there is no disbursement, such a delay or lack of disbursement would affect the banks’ liquidity.
The PDMO has to notify the banks about disbursement or non-disbursement in advance so that they know when to prepare funds for the project.
The Permanent Secretary’s Office at the Finance Ministry is responsible for monitoring the loan disbursements.
