QCOSTARICA – With a loan of US$21 million dollars from the Instituto Nacional de Seguros (INS) – state insurer – the government can move forward with the design and technical studies of the San Jose – San Ramon road project.

The INS board approved the loan requested by the Ministerio de Obras Públicas y Transportes (MOPT), confirmed INS CEO Elian Villegas.

“The initial capital is important because all the design work must be completed before it can be presented to pension funds and investment groups,” said Villegas.

The term of the loan is for one year, with an extension for a second if needed and will be made in colones or dollars, as required by the project, at current bank interest rates.

Last July, banks interested in financing the project (Banco de Costa Rica – BCR, Bancrédito, BCT, Lafise, Scotiabank and Improsa) expressed a need for an initial capital provided by the state.

A month earlier, in June, the Banco Nacional (BN) declined its interest saying the project was financially risky.

With the loan in place, the MOPT now has to obtain the approval by the Contraloría General de República (Comptroller’s office) before it can cash in and put out tenders.

Read more on the San Jose – San Ramon road project:

Meanwhile, the Superintendencia General de Seguros (Sugese) – insurance regulator – is demanding an explanation from the INS for its recent decisions granting loans and donations.

The head of the Sugese, Tomás Soley, stressed that the use of INS resources is regulated within a legal framework: the Ley Reguladora del Mercado de Seguros (Law Regulating the Insurance Market) dictating that 25% of the profits of the INS are to be transferred to the state each year; the remaining 75% is to capitalize the insurance business.

Piping in the discussion is former INS CEO, Guillermo Constenla, who says the state insurer’s main objective is to use earnings to grow in the local market and is technically unacceptable to use INS resources to address the needs of the Government.

Source: La Nacion

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