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Bank denies wire reports on Solomon Islands' loan

Mixed accounts * AFP reported that the Solomon Islans was only able to maintain some of its services after the country received loan installments from a US$14 million loan from Taiwan's Exim Bank. * Bank officials said, contrary to the wire report, that the money has only been used for commercial purposes. * They also said the last installment for the loan was given to the country earlier this year and not last week as the report stated.

Taiwan state-owned Exim (Export-Import) Bank (中國輸出入銀行) rebutted a wire report yesterday that said the bank had provided a loan to the Solomon Islands to use either as compensation for the country's civil-war victims or to maintain public services.

Quoting the Solomon Islands Broadcasting Corporation, an AFP report said that the Pacific island country has been driven to bankruptcy by a three-year civil war and has only managed to maintain some of its services through a loan of 100 million Solomon Island dollars (US$14 million) from Taiwan's Exim Bank.

Part of the money loaned by Taiwan to the Solomon Islands had been given to militants who staged a coup two years ago, the wire report said.

The wire report also said that the bank had advanced the last installment of the US$36 million loan last week.

While commenting that the loan advances to the Solomon Islands started last year, a senior Exim Bank official denied that the loan had been provided for the purpose of compensating Solomon Islands' civil war victims nor had any advancement of the loan installment been made this week, as the wire report stated.

Noting that the loan to the Solomon Islands had concluded earlier this year, the bank official stressed that interaction between the Solomon Islands and the bank was strictly business and all transactions were done according to business procedures.

"Loans provided to the Solomon Islands were only commercial loans. The loans had nothing to do with war compensation whatsoever," the Exim Bank senior official, who asked to remain anonymous, told the Taipei Times.

As the paid-in capital of the bank is only NT$10 billion (US$2.9 billion), the senior official said that there is no way the bank would provide a loan of US$100 million to the Solomon Islands, as had been claimed in the reports.

The Ministry of Foreign Affairs also denied the wire report. Ministry spokeswoman Katharine Chang (張小月) said that the loan received by the Solomon Islands from the Exim Bank had nothing to do with the ministry but was strictly a commercial loan between the Exim Bank and the Solomon Islands' Ministry of Finance.

The Solomons, one of Taiwan's 27 allies, has been bankrupted by the war that began in 1999 when militants on Guadalcanal Island tried to drive out migrants from the neighboring island of Malaita.

Around 100 people died and 20,000 people lost their homes in the conflict.
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