If plans are given the go-ahead, a loan of up to £400 million will be taken out to pay for the £466 million development adjacent to the current site.
The rest would be funded from States reserves. Jersey has the financial capital to pay for the whole project up front – around £809 million is held in the Island’s Strategic Reserve, also known as the ‘rainy day fund’ – but Treasury Minister Alan Maclean said that borrowing over a 40-year period at a time when interest rates are ‘historically low’ would mean that the Island ends up financially better off.
He said calculations predicted that by 2057 Jersey would have repaid the £400 million capital and all of the interest rates of around £10.5 million a year.
And by only using a fraction of the Strategic Reserve to pay for the project, it is estimated that the fund will have grown to £3.6 billion. Income earned on the Island’s ‘rainy day fund’ would be used to pay the interest on the loan.
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