Government uses SVb deposit to refinance debt at lower cost

ORANJESTAD — The Government of Aruba and the Social Insurance Bank (SVb) have signed a deposit agreement worth Afl. 50 million, with a term of 36 months and an annual interest rate of 3%. The funds will be used to refinance maturing government obligations, not to finance new spending.

The possibility of using temporary surpluses held by SVb and AZV has been included in Aruba’s temporary financial supervision legislation since 2024. CAft has repeatedly recommended using these funds to reduce reliance on more expensive borrowing and lower interest costs.

SVb retains a financial claim on the deposited amount, will receive interest and must be repaid the full Afl. 50 million at the end of the agreement. According to the Government, the money comes from a temporary surplus that SVb will not need to cover benefits and operating expenses during the next three years.

Finance Minister Geoffrey Wever emphasized that the agreement does not create additional room in the budget. Instead, it replaces part of the public financing already approved by Parliament with a less costly option. Parliament has received copies of both the agreement and CAft’s advice.