The Central Bank of Sao Tome and Principe has had one of its accounts seized as part of a judicial execution related to a $5.5 million compensation claim by Synergies. According to the Minister of Economy and Finance, Gareth Guadalupe, the claim stems from a long-standing dispute over the termination of a hydroelectric power plant contract. The dispute dates back to 2005 when the Sao Tomean government unilaterally rescinded the contract.
In 2009, an arbitral tribunal in Paris ruled in favor of Synergies, a Portuguese-British company, and awarded them $3.6 million in compensation. However, due to prolonged non-payment, the amount has increased to $5.5 million, including accumulated interest and costs. The government has since been working to resolve the issue, with the Minister assuring that they are acting in good faith to settle the debt.
The seized account is part of the government's efforts to address the issue, with Guadalupe stating that the Central Bank has formed a team of lawyers to work on invoking the immunity of state accounts. Meanwhile, the Treasury Public is working to liquidate not only the overdue amounts but also the predicted amounts up to 2028, which would allow for the lifting of the seizure.
According to Guadalupe, the creditor has been informed of the government's actions, but there has been no reaction yet. The government has also sent a schedule to Synergies for the full regularization of the debt, which includes payment of the overdue amounts and anticipated future payments. This move aims to definitively close the debt to Synergies.
The proposed payment plan includes the $1 million due in May 2026, $1 million due in May 2027, and $650,000 predicted for May 2028. By settling these amounts, the government aims to not only clear the overdue payments but also address future obligations, effectively closing the debt to Synergies.
The long-standing dispute began with the termination of the hydroelectric power plant contract in 2005. Since then, the case has been ongoing, with various attempts to resolve the issue. The government has expressed its commitment to settling the debt and lifting the seizure on the Central Bank account.
The situation highlights the ongoing efforts of the Sao Tomean government to address its financial obligations and resolve long-standing disputes. With the proposed payment plan and the work of the Central Bank's team of lawyers, the government aims to bring closure to the issue and restore normalcy to its financial operations.
Key points
- The Central Bank account was seized due to a $5.5 million compensation claim by Synergies.
- The government has proposed a payment plan to settle the debt.
- The dispute dates back to 2005 over the termination of a hydroelectric power plant contract.
