Municipalities to borrow CYP 150 mln

The Cabinet gave the green light to the 23 municipalities to borrow CYP 150 mln in new funds, mostly to repay old loans at higher prices and restructure their loans.

According to the government decision, all the loans will be fully guaranteed by the state. Government Spokesman Kypros Chrysostomides said that the loan restructuring will be beneficial to both the municipalities and the government because of lower borrowing costs.

Chrysostomides said last year the government shelled out CYP 17.3 mln in municipality loan and interest repayments, with the amount seen now declining.

Last week, the Municipality of Paphos signed a CYP 1 mln loan deal with the Cooperative Central Bank at 0.70 basis points above the Lombard borrowing rate to finance the development of new roads in the region.