WILLEMSTAD — The government of Curaçao has officially requested advice from the Financial Supervision Board (CFT) regarding the refinancing of a 140 million Caribbean guilder (XCG) loan, which is due on October 15, 2025. The CFT has responded positively, supporting Curaçao’s move to responsibly manage its public debt without endangering the country’s financial stability.
Finance Minister Javier Silvania submitted the formal petition to the CFT, which reviewed the request thoroughly and ultimately agreed that refinancing the maturing debt is both justified and necessary. “I’m pleased with the CFT’s positive response,” Minister Silvania said. “The Financial Supervision Act (Rijkswet Financieel Toezicht) provides room for refinancing, and while we are committed to reducing our public debt, we cannot jeopardize the country's liquidity.”
Despite initial resistance from the Dutch government, which pushed for full repayment of the loan in a single installment, the RFT explicitly allows the refinancing of current debts. Curaçao is exercising this right to protect its financial stability, and the CFT acknowledged that full repayment at this time would be irresponsible.
Key Reasons Behind the Request
There are three primary reasons why Curaçao is opting not to repay the full amount at once:
CMC Restructuring Needs:
A total of XCG 111.5 million is needed to invest in the Curaçao Medical Center (CMC)—XCG 87.5 million for medical equipment and building maintenance, and XCG 24 million to recapitalize its operations. These funds are critical to ensuring the continuity of healthcare services on the island.
Strategic Reserve Maintenance:
The government is maintaining a prudent liquidity reserve between XCG 80–140 million at the Central Bank (CBCS). This emergency fund safeguards public operations and allows for unforeseen expenditures.
Preparation for International Risks:
With potential trade policy changes under the new U.S. administration—such as higher import tariffs—Minister Silvania stressed the need to maintain extra liquidity. As a small and open economy, Curaçao is particularly vulnerable to external shocks that could affect inflation, purchasing power, and tourism.
Minister Silvania emphasized the government’s duty to ensure sufficient funds are available to meet essential public needs, including healthcare, education, and social support. “Paying the full debt in one go would severely strain our liquidity and impact our ability to serve the people,” he added.
Phasing Out ‘Bullet Loans’
The maturing XCG 140 million loan is part of a broader series of so-called "bullet loans" granted by the Netherlands under its debt relief program. These loans are characterized by full repayment at maturity, without interim installments. Upcoming maturities include:
2020: XCG 100 million (already refinanced into a 15-year linear loan at 0% interest)
2025: XCG 140 million (current refinancing request)
2030: XCG 370 million
2035: XCG 475 million
2040: XCG 582 million
These looming repayments pose a significant burden on Curaçao’s national budget. Minister Silvania advocates transitioning away from the bullet loan model and instead moving toward linear or annuity-based loans that are repaid gradually. This approach would promote more responsible, predictable, and sustainable debt management.
A Balanced Path Forward
The government stressed that this refinancing strategy is not just a financial necessity but a fundamental step in ensuring economic resilience and social stability. A healthy balance between debt repayment, public investment, and the preservation of strategic reserves is essential for the island’s future.
