Imbert: Funding for PSIP projects

He referred to Section 15 of the HSF Act which indicates that where petroleum revenues collected in any financial year fall before the estimated petroleum revenues for that financial year by at least ten percent, withdrawals can be made from the fund, based on whichever is the lesser amount. The minister said this is either 60 percent of the amount of the shortfall of petroleum revenues for that year or 25 percent of the balance standing to the credit of the fund at the beginning of the year.

“In this case, 25 percent of the balance in the fund would be US$1.43 billion and 60 percent of the shortfall in revenue is US$251 million. So the lesser amount has been used,” Imbert explained.

The minister also said it is public knowledge that the projected fiscal deficit in the budget of $6 billion will be financed by a combination of borrowing and a withdrawal from the HSF. Against this background, Imbert said the $1.71 billion or US$251 million withdrawal from the HSF, “is therefore consistent with the 2017 Budget statement.” He told senators that the net asset value of the HSF on March 17 was US$5.721 billion. Recalling that the previous figure given on March 3 was US$5.695 billion, Imbert said this meant the fund increased in value by US$26 million over the last two weeks. The minister said an examination of the period May 16, 2016 to March 17, 2017, showed that the HSF increased in value by US$301 million, from US$5.420 billion last May to US$5.721 billion, last Friday.

Imbert further explained that this second drawdown is US$50 million less than the income earned by the Fund over the last ten months. He said after this drawdown, the actual value of the HSF will be US$5.470 billion which is US$26 million more than previously estimated, and US$50 million more than the balance after the first drawdown last year.