• 🏳️‍⚧️Edward [it/its]
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    10 months ago

    I have also seen claims, (with no real evidence) that in the terms of the loan is a clause that forces the borrower to create an escrow account that pays the loan in advance of other responsibilities. But as I said, those claims didn’t really back it up with a lot evidence

    The liberationnews article did contain this:

    But according to analysis by AidData, who obtained a copy of the contract, the airport was not even a source of collateral that the lender could seize in the first place! What the conditions of the agreement did require was that cash collateral be placed in a separate escrow account which could then be seized in the event of default — a fairly standard clause for international projects financing

    • TranscendentalEmpire@lemm.ee
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      10 months ago

      But according to analysis by AidData, who obtained a copy of the contract, the airport was not even a source of collateral that the lender could seize in the first place! What the conditions of the agreement did require was that cash collateral be placed in a separate escrow account which could then be seized in the event of default — a fairly standard clause for international projects financing

      Minus the misinformation about them supposedly wanting to seize the airport, that’s fairly close to what I have read in the past about the escrow account. Though I wouldn’t say that it’s fairly standard.

      It can be a normal part of thing like IMF loans or aid packages, however they are usually set up in conjunction with the borrowers other lenders. Very rarely are they made in secret or behind closed doors, as the escrow accounts are usually made to assure other borrowers that the new lender is a part of the payment program, and not restructuring the payment program in their favour.

      And again this is all fairly speculative, the last time I read an article that includes info on the escrow account it was from AP who also claimed they had a copy. However, I haven’t seen anyone actually publish it which makes me pretty skeptical.