In a statement to Parliament on Friday, UK International Development secretary Andrew Mitchell said that the loan had been necessary because the financial situation in the islands had "worsened to the point where it was not possible for [the Turks and Caicos Islands’] Government to meet their June financial commitments, including payment of public sector salaries”.
“Without immediate UK support, TCI would fall further into economic crisis,” Mitchell said.
Among those destined to receive the money will be the islands’ police, healthcare employees and teachers, he added.
It was not immediately known what the terms of the loan to TCI are, including the interest rate or repayment schedule. However, in his statement, Mitchell said the costs to the UK government would “be at or near zero…over the medium term”.
A British overseas territory and former colony, whose closest neighbour is the Bahamas, the Turks and Caicos Islands has been struggling to regain its financial footing since Britain suspended its government last year, following corruption charges. Its tourism-dependent economy has also been hit by the global economic downturn.