Guinea is set to pay back the US$25 million loan it agreed with South African investment company, Palladino Capital
Guinea’s finance minister, Kerfalla Yansane, was one of the ministers who signed the loan agreement last year but said that the country’s state resources company, SOGUIPAMI, would now return the money to Palladino.
"SOGUIPAMI will reimburse the money in the coming days so as to end to the contract," Yansane told Reuters.
British newspaper, the Sunday Times, recently reported that a default on the loan would result in Guinea losing 30 per cent of its natural resources worth billions of dollars, which Palladino strenuously denied.
Palladino demanded an immediate repayment of the loan on May 24 after its queries to the Guinea government regarding the destination of the loan funds went unanswered.
"The loan agreement contains customary default provisions but given the limited cash resources of the government, it provided that in event of a default it could be repaid in cash and/or in kind," the company said in the statement.
"However such repayment cannot legally exceed the value of the debt due under the loan agreement and it can in no way result in the appropriation by our company of 30 percent of private or national assets worth billions of dollars."