Republic of Suriname 9.875% Notes Due 2023

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LUXEMBOURG LISTING PROSPECTUS

OFFERING MEMORANDUM US$125,000,000

Republic of Suriname 9.875% Notes due 2023 The Republic of Suriname (the “Republic”) is offering US$125,000,000 aggregate principal amount of its 9.875% notes due 2023 (the “Notes”). Interest on the Notes will be payable semi-annually in arrears on June 30 and December 30 of each year commencing on June 30, 2020. Principal of the Notes will be repaid in eight semi-annual installments, as set forth herein, commencing on June 30, 2020. The Notes will have a final maturity date of December 30, 2023. The Notes will be general, direct, unconditional, unsubordinated and unsecured obligations of the Republic and will rank equally with all other existing and future unsubordinated obligations of the Republic. The Notes will be backed by the full faith and credit of the Republic. Payment of principal and interest of the Notes will be supported by an accounts agreement pursuant to which all dividends paid to the Republic by Staatsolie Maatschapij Suriname N.V., which is wholly-owned by the Republic, will be paid directly into a collection account, as further described herein. In addition, the Republic will be required within 90 days from the date the Notes are issued to obtain the agreement of certain other third parties to make certain payments owed to the Republic or to certain entities controlled by the Republic directly into the accounts under the accounts agreement, as more fully described herein. Funds deposited in the collection account will be used to make payments of principal and interest on the Notes and payments of interest on the Republic’s outstanding 9.25% Notes due 2026 (the “2026 Notes”). However, none of these accounts nor the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited from time to time in such accounts will constitute collateral securing the Notes. All such funds will remain subject to potential claims from the Republic’s other creditors. If the Republic does not obtain the agreements of such third parties to make payment directly into the collection account within the specified time period, the interest rate applicable to the Notes will increase by 3.0%. Such additional interest will accrue for so long as the requirement to obtain such agreements has not been satisfied. For more information, see “Description of the Notes—Accounts Agreement” and “Description of the Notes—Additional Interest.” The net proceeds from the offer and sale of the Notes will initially be deposited into an escrow account maintained outside the Republic by an escrow agent. The proceeds will only be released from escrow upon completion of the transfer of the Afobaka hydropower plant to a state-owned entity. If such transfer is not completed on or prior to the date that is 90 days after the issuance of the Notes, the Republic will be obligated to make a mandatory redemption of the Notes in full at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to (but excluding) the date of redemption. Neither the escrow account nor the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited in the escrow account will constitute collateral securing the Notes. The Republic will also be required to make a mandatory redemption of Notes with the proceeds of certain liquidity events, as further described herein. For more information, see “Description of the Notes—Mandatory Redemption.” The Notes will contain provisions, commonly known as “collective action clauses,” regarding acceleration and voting on future amendments, modifications and waivers. Under these provisions, the Republic may amend or obtain waivers of the payment provisions of the Notes and certain other terms with the consent of holders of a specified percentage of the aggregate principal amount of the outstanding Notes. Investment in the Notes involves risks. See “Risk Factors” beginning on page 10 regarding certain risks you should consider before investing in the Notes. Issue price: 95.000422% plus accrued interest, if any, from December 20, 2019 The Notes have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. The Notes may not be offered or sold within the United States or to U.S. persons except to qualified institutional buyers in reliance on the exemption from registration provided by Rule 144A under the Securities Act (“Rule 144A”) and to certain persons in offshore transactions in reliance on Regulation S under the Securities Act (“Regulation S”). You are hereby notified that sellers of the Notes may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to trade them on the Euro MTF market of such exchange. Delivery of the Notes in book-entry form is expected to be made on or about December 20, 2019 through the facilities of the Depository Trust Company (“DTC”) and its direct and indirect participants, including Euroclear SA/NV, as operator of the Euroclear System (“Euroclear”) and Clearstream Banking, société anonyme (“Clearstream”), against payment in New York, New York.

Book-Runner and Lead Manager Oppenheimer & Co. Co-Manager Republic Bank The date of this Luxembourg Listing Prospectus is December 20, 2019 Suriname TABLE OF CONTENTS

GENERAL PROVISIONS ...... iv PRESENTATION OF INFORMATION ...... vii FORWARD-LOOKING STATEMENTS ...... ix ENFORCEMENT OF CIVIL LIABILITIES ...... x EXCHANGE RATE INFORMATION ...... xi SUMMARY ...... 1 THE OFFERING ...... 4 RISK FACTORS ...... 10 USE OF PROCEEDS ...... 17 THE REPUBLIC OF SURINAME ...... 18 THE SURINAMESE ECONOMY ...... 24 BALANCE OF PAYMENTS ...... 41 MONETARY AND FINANCIAL SYSTEM ...... 51 PUBLIC SECTOR FINANCES ...... 71 GOVERNMENT DEBT ...... 86 DESCRIPTION OF THE NOTES ...... 93 TRANSFER RESTRICTIONS ...... 115 PLAN OF DISTRIBUTION ...... 117 TAXATION ...... 124 OFFICIAL STATEMENTS ...... 128 VALIDITY OF THE NOTES ...... 128 GENERAL INFORMATION ...... 129 ANNEX A: ELECTRICITY SECTOR REFORM ...... 130

iii GENERAL PROVISIONS

IN MAKING AN INVESTMENT DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE REPUBLIC AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED.

In making an investment decision, you should rely only on the information contained in this Luxembourg Listing Prospectus (the “Offering Memorandum”). We have not, and the Initial Purchaser has not, authorized anyone to provide you with information that is different from the information contained in this Offering Memorandum. This Offering Memorandum may only be used where it is legal to sell the Notes. The information in this Offering Memorandum may only be accurate on the date of this Offering Memorandum.

This Offering Memorandum may only be used for the purposes for which it has been published.

The Notes will be issued in registered form only. Notes sold in offshore transactions in reliance on Regulation S will be represented by one or more permanent global notes in fully registered form without interest coupons (the “Regulation S Global Note”) deposited with a custodian for, and registered in the name of a nominee of, DTC. Notes sold in the United States to qualified institutional buyers as defined in, and in reliance on, Rule 144A will be represented by one or more permanent global notes in fully registered form without interest coupons (the “Restricted Global Note” and, together with the Regulation S Global Note, the “Global Notes”) deposited with a custodian for, and registered in the name of a nominee of, DTC. Beneficial interests of DTC participants (as defined under “Book-Entry Settlement and Clearance”) in the Global Notes will be shown on, and transfers thereof between DTC participants will be effected only through, records maintained by DTC and its direct and indirect participants, including Euroclear and Clearstream, if applicable. See “Book-Entry Settlement and Clearance.” Except as described herein, definitive Notes will not be issued in exchange for beneficial interests in the Global Notes. See “Book-Entry Settlement and Clearance.” For restrictions on transfers applicable to the Notes, see “Plan of Distribution” and “Transfer Restrictions.”

The Republic has taken reasonable care to ensure that the information contained in this Offering Memorandum is true and correct in all material respects and not misleading as of the date hereof, and that, to the best knowledge and belief of the Republic, there has been no omission of information which, in the context of the issue of the Notes, would make this Offering Memorandum as a whole or any such information misleading in any material respect. The Republic accepts responsibility accordingly.

The Notes described in this Offering Memorandum have not been registered with, recommended by or approved by the U.S. Securities and Exchange Commission (the “SEC”) or any other U.S. federal or state securities commission or regulatory authority, nor has the SEC or any such state securities commission or authority passed upon the accuracy or adequacy of this Offering Memorandum. Any representation to the contrary is a criminal offense.

This Offering Memorandum does not constitute an offer by, or an invitation by or on behalf of, the Republic or the Initial Purchaser to subscribe to or purchase any of the Notes. You are not to construe the contents of this Offering Memorandum as investment, legal or tax advice. Each recipient of this Offering Memorandum shall be deemed to have made its own investigation and appraisal of the financial condition of the Republic. The distribution of this Offering Memorandum or any part thereof and the offering, possession, sale and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this Offering Memorandum comes are required by the Republic and the Initial Purchaser to inform themselves about and to observe any such restrictions. We are not, and the Initial Purchaser is not, making any representation to you regarding the legality of an investment in the Notes by you under applicable laws. The Notes are subject to restrictions on transferability and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws pursuant to registration or exemption therefrom. See “Plan of Distribution” and “Transfer Restrictions” for a description of further restrictions on the offer, sale and delivery of Notes and on distribution of this Offering Memorandum and other offering material relating to the Notes. You should be aware that you may be required to bear the financial risks of an investment in the Notes for an indefinite period of time.

iv Each person purchasing Notes pursuant to Rule 144A will be deemed to:

 represent that it is purchasing the Notes for its own account or an account with respect to which it exercises sole investment discretion and that it or such account is a qualified institutional buyer (as defined in Rule 144A); and

 acknowledge that the Notes have not been and will not be registered under the Securities Act or any state securities laws and may not be reofferred, resold, pledged or otherwise transferred except as described under “Transfer Restrictions.”

Each purchaser of Notes sold outside the United States in reliance on Regulation S will be deemed to have represented that it is not purchasing Notes with a view to distribution thereof in the United States.

Each person purchasing Notes also acknowledges that:

 it has been afforded an opportunity to request from the Republic and to review, and it has received, all additional information considered by it to be necessary to verify the accuracy of the information herein;

 it has not relied on the Initial Purchaser or any person affiliated with the Initial Purchaser in connection with its investigation of the accuracy of the information contained in this Offering Memorandum or its investment decision; and

 no person has been authorized to give any information or to make any representation concerning the Republic or the Notes other than those contained in this Offering Memorandum and, if given or made, such information or representation should not be relied upon as having been authorized by the Republic or the Initial Purchaser.

We reserve the right to withdraw the offering of the Notes at any time, and we and the Initial Purchaser reserve the right to reject any commitment to subscribe for the Notes in whole or in part and to allot to you less than the full amount of Notes subscribed for by you. We are making this offering subject to the terms described in this Offering Memorandum.

Application has been made to admit the Notes offered hereby to listing on the Official List of the Luxembourg Stock Exchange and to trading on the Euro MTF market of that exchange. See “General Information.” This Offering Memorandum constitutes a prospectus for purposes of Part IV of the Luxembourg law on prospectus securities dated July 16, 2019. We will comply with any undertakings given by us from time to time to the Luxembourg Stock Exchange in connection with the Notes, and we will furnish to them all such information as the rules of the Luxembourg Stock Exchange may require in connection with the listing of the Notes. The Luxembourg Stock Exchange takes no responsibility for the contents of this Offering Memorandum, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this Offering Memorandum.

PROHIBITION OF SALES TO EEA RETAIL INVESTORS

The Notes are not intended to be offered, sold or otherwise made available to and should not be offered, sold or otherwise made available to any retail investor in the European Economic Area (“EEA”). For these purposes, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Regulation (EU) 2017/1129 (the Prospectus Regulation). Consequently no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

v NOTICE TO INVESTORS IN THE UNITED KINGDOM

This Offering Memorandum is for distribution only to persons who (i) have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended, the “Financial Promotion Order”), (ii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc.”) of the Financial Promotion Order, (iii) are outside the United Kingdom, or (iv) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as “relevant persons”). This Offering Memorandum is directed only at relevant persons and must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Offering Memorandum relates is available only to relevant persons and will be engaged in only with relevant persons.

vi PRESENTATION OF INFORMATION

In this Offering Memorandum, unless otherwise specified:

 References to the “Republic” and “Suriname” are to the Republic of Suriname.

 References to “Suralco” are to Suriname Aluminum Company, L.L.C., a Surinamese company that is wholly-owned by Alcoa World Alumina LLC, which is a U.S. company that is 60%-owned by Alcoa Corporation and 40%-owned by Australian company Alumina Limited.

 References to the “Caribbean” and “Caribbean countries” are to Suriname, Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, British Virgin Islands, Cayman Islands, Dominica, the Dominican Republic, Grenada, Guyana, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, and Turks and Caicos.

 The central government of Suriname (the “Government”) consists of the Cabinet of the President; Cabinet of the Vice President; Ministry of Foreign Affairs; Ministry of Natural Resources; Ministry of Transport, Communication and Tourism; Ministry of Sport and Youth Affairs; Ministry of Trade, Industry and Tourism; Ministry of Defense; Ministry of Education and Community Development; Ministry of Public Works, Transport and Communication; Ministry of Home Affairs; Ministry of Public Health; Ministry of Social Affairs and Housing; Ministry of Finance; Ministry of Regional Development; Ministry of Agriculture, Animal Husbandry and Fisheries; Ministry of Justice and Police; Ministry of Labor; and the Ministry of Physical Planning, Land and Forestry Management. It also includes all decentralized agencies directly dependent on these ministries.

 The Central Bank of Suriname (“CBvS”) is independent from the Government and is not included in any statistics in this Offering Memorandum with respect to the Government.

 References to “GDP” are to gross domestic product at market prices, which measures the total value added of final products and services produced in a country in a specific year. Nominal GDP measures the total value added of final production at current prices. Real GDP measures the total value added of final production in constant prices of a particular year, which allows for comparisons of historical GDP that exclude the effects of Surinamese inflation. In this Offering Memorandum, real GDP figures are based on constant 2007 prices, the year used by the Bureau of Statistics of Suriname (the “General Bureau of Statistics”) for purposes of maintaining real GDP statistics. GDP growth rates and growth rates for the various sectors of the Surinamese economy are based on real figures, unless otherwise indicated. Figures expressed as a percentage of GDP use nominal GDP as the base number. GDP figures presented are based on nominal GDP unless otherwise indicated.

 References to “CIF” are to imports including cost, insurance and freight charges.

 References to “net international reserves” (“NIR”) are to monetary gold and foreign currency reserves owned and controlled by the CBvS, minus any outstanding short-term foreign exchange liabilities of the CBvS.

 The term “current account balance” as applied to the balance of payments covers all flows of goods, services, income and non-capital transfers between Suriname residents and non-residents.

The fiscal year of the Government commences on January 1 and ends on December 31 of each year. The fiscal year ended December 31, 2018 is referred to in this Offering Memorandum as “2018” and other fiscal years are referred to in a similar manner.

Certain financial and economic information presented in this Offering Memorandum may be subject to routine revision and possible adjustment. In particular, some information and data are preliminary and are subject to revision or adjustment as additional or amended information becomes available. We have identified such information

vii and data as “preliminary” or “estimated” in this Offering Memorandum. The Republic does not currently expect that any such revisions or adjustments will be material, although the Republic cannot provide any assurances that material changes will not be made or that the information provided is complete. We are not obligated to distribute such revised data and information to any investor.

Certain statistical information contained herein has been derived from official publications of, and information supplied by, among others, the International Monetary Fund (the “IMF”), the United Nations Conference on Trade and Development (“UNCTAD”), the United Nations Development Program (the “UNDP”) and the World Bank Group.

Certain economic data contained herein has been derived from data provided by the Suriname Working Group on Financial Programming (the “WGFP”). The WGFP was established in 2015 to be the macroeconomic programming and forecasting unit for the Government and the CBvS. The WGFP comprises the Planning Office (responsible for GDP forecasts), the Economic Affairs Department of the Ministry of Finance (responsible for fiscal sector forecasts), the Research and Statistics departments of the CBvS (responsible for monetary and balance of payments forecasts), and the Suriname Debt Management Office (the “SDMO”) (responsible for debt and debt service forecasts). The WGFP was established to ensure quantitative consistency of macroeconomic policies, including budget forecasts, and to support the work of the Government and the CBvS in determining fiscal and monetary policies. The WGFP applies the IMF’s financial programming methodology and exchanges and coordinates data though a dedicated web portal created by the CBvS. The WGFP’s forecasts are produced twice a year and are not published separately but they become part of published Ministry of Finance and CBvS forecasts. Official GDP figures are available for years prior to and including 2018. Any data in this Offering Memorandum presented as a ratio to 2019 GDP is based on the forecast of GDP for 2019 made by the WGFP.

Certain economic data contained herein has been derived from data from the CBvS monthly economic activity indicator (the “MEAI”), a short-term indicator to measure movements of economic activity in Suriname. The MEAI uses primary and secondary data sources. The primary data source consists of data derived from an establishment survey conducted among approximately 200 companies, which includes “key players”. The secondary data sources consist of UNCTAD Automated System for Customs Data (“ASYCUDA”), the CBvS, the General Bureau of Statistics and financial reports and production data of selected companies. The MEAI is a fixed-based index that uses the structure of the economy in 2011 as a base year. Following the Laspeyres index formula, an index is generated for each activity. Weights by industry derived from the nominal value added as published by the GBS, are used to generate the total index for the economy. Growth rates are based on the 12-month moving average approach.

Unless otherwise specified or the context requires, references herein to “U.S. dollars” and “US$” are to United States dollars; references to “SRD” are to Surinamese dollars, the national currency of the Republic; and references to “SDR” are to Special Drawing Rights of the International Monetary Fund.

Certain amounts included in this Offering Memorandum have been subject to rounding adjustments; accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures which precede them.

viii FORWARD-LOOKING STATEMENTS

This Offering Memorandum contains certain forward-looking statements (as such term is defined in the Securities Act) concerning the Republic. These statements are based upon beliefs of certain government officials and others as well as a number of assumptions and estimates which are inherently subject to significant uncertainties, many of which are beyond the control of the Republic. Future events may differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements are principally contained in the sections “Summary,” “The Republic of Suriname,” “The Surinamese Economy,” “Balance of Payments,” “Monetary and Financial System,” “Public Sector Finances” and “Public Sector Debt” and “Annex A: Electricity Sector Reform.” In addition, in those and other portions of this Offering Memorandum, the words “anticipates,” “believes,” “contemplates,” “estimates,” “expects,” “plans,” “intends,” “projections” and similar expressions, as they relate to the Republic, are intended to identify forward-looking statements. Such statements reflect the current views of the Republic with respect to future events and are subject to certain risks, uncertainties and assumptions. The Republic undertakes no obligation publicly to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks and uncertainties, there can be no assurances that the events described or implied in the forward-looking statements contained in this Offering Memorandum will in fact occur.

ix ENFORCEMENT OF CIVIL LIABILITIES

The Republic is a sovereign state. Consequently, it may be difficult for investors to obtain or realize in the United States or elsewhere upon judgments against the Republic.

To the fullest extent permitted by applicable law, the Republic will irrevocably submit to the non-exclusive jurisdiction of any New York State or U.S. federal court sitting in The City of New York, and any appellate court thereof, in any suit, action or proceeding arising out of or relating to the Notes or the Republic’s failure or alleged failure to perform any obligations under the Notes, the Indenture, the Escrow Agreement or the Accounts Agreement (a “Related Proceeding,” which term shall exclude claims or causes of action arising under the federal securities laws of the United States or any state securities laws), and the Republic will irrevocably agree that all claims in respect of any such Related Proceeding may be heard and determined in such New York State or U.S. federal court. The Republic will irrevocably waive, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any related proceeding and any objection to any Related Proceeding whether on the grounds of venue, residence or domicile. See “Description of the Notes—Governing Law and Jurisdiction.”

To the extent that the Republic or any of its revenues, assets or properties has or may acquire any immunity (sovereign or otherwise) from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its revenues, assets or properties the Republic has, to the fullest extent permitted under the U.S. Foreign Sovereign Immunities Act of 1976, as amended (the “Immunities Act”), irrevocably waived such immunity in respect of any action or proceeding arising out of, or related to, the offering and sale of the Notes or the Republic’s failure, or alleged failure, to perform any obligations under the Notes. This waiver covers the Republic’s sovereign immunity and immunity from prejudgment attachment, post-judgment attachment and attachment in aid of execution. However, the Republic has not consented to service or waived sovereign immunity with respect to actions brought against it under the U.S. federal securities laws or any state securities laws. In the absence of a waiver of immunity by the Republic with respect to such actions, it would not be possible to obtain a judgment in such an action brought in a U.S. court against the Republic unless such court were to determine that the Republic is not entitled under the Immunities Act to sovereign immunity with respect to such action.

Even if a U.S. judgment could be obtained in any such action under the Immunities Act, it may not be possible to enforce in the Republic a judgment based on such a U.S. judgment. Execution upon property of the Republic located in the United States to enforce a U.S. judgment may not be possible except under the limited circumstances specified in the Immunities Act. In addition, the Government has been advised by its Surinamese counsel that foreign judgments, including in respect of civil liabilities predicated upon applicable securities laws, cannot be enforced in Suriname unless there is a bilateral or multilateral treaty in force regarding the reciprocal recognition of judgments. Suriname currently has such a treaty only with the Netherlands. Even if an applicable treaty were in effect, the recognition and enforcement of a foreign judgment in Suriname will in all cases be subject to exceptions and limitations provided for in the laws of Suriname, including, for example, that assets that are meant for public service cannot be seized. Absent a treaty regarding reciprocal recognition of judgments, in order for a foreign judgment to be enforceable in Suriname, the case will need to be submitted to a Surinamese court, which will reconsider the merits of the case. Such a submission will require, among other things, the translation into Dutch of all documents related to the foreign judgment. As a result, it may be difficult to obtain recognition or enforcement in Suriname of a foreign judgment in respect of the Notes.

See “Risk Factors – Suriname is a sovereign state and, accordingly, it may be difficult to obtain or enforce judgments against us.”

x EXCHANGE RATE INFORMATION

This Offering Memorandum translates certain SRD amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise indicated, any such amounts have been translated at the applicable official CBvS exchange rate on the date of such data or the average of such rates for the relevant period, as applicable. Currency conversions contained in this Offering Memorandum should not be construed as representations that SRDs have been, could have been or could be converted into U.S. dollars at the indicated or any other rate of exchange. See “Monetary and Financial System — Foreign Exchange.”

xi SUMMARY

The following summary does not purport to be complete and is qualified in its entirety by, and is subject to, the detailed information appearing elsewhere in this Offering Memorandum.

The Republic of Suriname

Suriname is South America’s least populated independent country, with an area of 163,820 square kilometers and an estimated population of approximately 575,991 people in 2018 according to the World Bank. Suriname is bordered on the north by the Atlantic Ocean, on the south by Brazil, on the west by Guyana and on the east by French Guiana. Although geographically located in South America, Suriname is generally categorized from an economic, political and cultural perspective as part of the Caribbean region. Suriname is a presidential republic and its capital is Paramaribo, which is also the country’s largest city. Desiré Delano Bouterse was elected President of the Republic in August 2010 and was re-elected in July 2015. The next general election is scheduled to be held in May 2020.

Suriname is a former Dutch colony. While Dutch is the official language of government, business, media, and education, Sranan, a creole language, is widely used. Suriname is the only territory outside Europe where Dutch is spoken by a majority of the population.

The Surinamese economy is highly concentrated in the extractive industries, primarily gold and oil, and their related industrial and manufacturing and export activities. These sectors play a key role in driving economic growth, the balance of payments, employment and fiscal revenue. Wholesale and retail trade and private sector construction are also important contributors to economic activity and depend on the disposable income generated in the mining industry and demand from the Government.

Suriname’s ratios of debt to GDP have stabilized since 2017 due to a reduction in the fiscal deficit, renewed economic growth, a stable exchange rate, and some reliance on non-debt creating forms of fiscal financing such a privatization. Suriname’s public external debt was US$1,715.4 million or 68.9% of total debt at the end of 2018. The Government’s debt-to-GDP ratio was 68.1% as at December 31, 2018.

The SRD was de facto pegged to the U.S. dollar until March 2016, when the CBvS completed a change to flexible exchange rate regime anchored in foreign exchange auctions aimed at ensuring a faster convergence of the official exchange rate with the market rates. The CBvS has allowed the official exchange rate to respond to changing market conditions since then and the exchange rate depreciated gradually to approximately SRD 7.52 per U.S. dollar in mid-2019.

Recent Economic Developments

Suriname’s economy was adversely affected by the sharp decline in the international prices of its main export commodities, gold, and oil, which began in 2013, and the closure of the country’s remaining alumina refinery in late 2015. These events resulted in sharp decreases in exports and fiscal revenue and caused substantial external current account and fiscal deficits.

In August 2015, the Government began implementing an economic reform program in response to the sharp decline in fiscal revenue, aimed first at restoring economic stability and at the same time beginning to put in place a package of reforms. In addition to restoring macroeconomic sustainability through fiscal, exchange rate, and monetary policy adjustments, the key objectives of the Government’s adjustment program were to increase the economy’s resilience to future shocks through more dynamic and adaptable exchange rate, monetary, and financial policies.

1 continuously. From the peak of 79% in October 2016, 12-month inflation decreased to 9.2% in December 2017, to 5.5% in December 2018 and to 4.2% in October 2019. The fiscal deficit declined from 10.6% of GDP in 2016 to 7.5% in 2018. The current account of the balance of payments has improved from a deficit of 16.5% of GDP in 2015 and 5.6% of GDP in 2018. International reserves increased from US$330 million at the end of 2015 to US$580 million at the end of 2018, covering more than three months of imports. As of September 30, 2019, international reserves were US$720 million, covering 3.9 months of imports.

Electricity Sector Reform

The Government is currently undertaking a restructuring and reform the country’s electricity sector. Subsidies that have been provided to the power sector by the Government over many years have significantly affected Government public finances, and the Government believes that substantial cost savings can be realized through a series of reforms, cost saving initiatives and structural changes to the power sector.

The following steps are part of the Government’s planned restructuring and reform of the electricity sector:

 The Government plans that substantially all of the electricity generation assets in Suriname will be consolidated under Staatsolie Power Company Suriname N.V. (“SPCS”), which is indirectly 100%-owned by the Government.

 On or before the date that is 90 days after the Issue Date, utilizing the proceeds of the offering of the Notes, the Government will pay approximately US$111 million to Suriname Aluminum Company, L.L.C. (“Suralco”) for arrears representing energy from the Afobaka hydropower plant (the “Afobaka HPP”) provided to the Government over for which the Government has not yet paid and profits that Suralco would have generated had it owned the Afobaka HPP through December 31, 2019. See “Description of the Notes – Escrow Account.”

 The Government expects that the Afobaka HPP will be transferred to SPCS within no more than 90 days after the closing of the offering of the Notes. The transfer of the Afobaka HPP to the Government will be made pursuant to the Afobaka Hydroworks Transfer And Execution Agreement, which was approved by the National Assembly by Act of September 6, 2019 (Bulletin of Acts and Decrees 2019, number 96).

 The Government plans that EBS will transfer its two adjacent power stations, named DPP1 and DPP2 (together, the “Saramaccastraat Thermal Plant”), to SPCS, and that the Government will eliminate the arrears currently owned to it by EBS, which will serve to strengthen EBS’s financial condition.

 In conjunction with the foregoing steps, the Government plans for electricity tariffs to be increased gradually over the next five years, beginning in June 2020, and for subsidies currently provided to the electricity generation sector to be eliminated in the period during which the tariffs are increased.

2 Selected Economic Indicators

For the Year Ended December 31, 2014 2015 2016 2017 2018 2019(1) (Annual percentage changes, unless otherwise indicated) Real Sector GDP at current prices (SRD billions) 17.3 16.4 19.5 24.0 25.8 28.2 Real GDP growth 0.3 (3.4) (5.6) 1.8 2.6 1.4 Consumer prices (year-on-year) 3.9 25.2 52.4 9.2 5.5 3.3

Monetary Sector (end of year percentage change) Banking system net foreign assets (16.3) (37.2) 17.1 (2.5) 30.9 (3.7) Broad money 5.4 11.8 52.3 8.8 9.0 10.2 Private sector credit 8.9 15.4 27.5 1.2 (4.6) 7.3

(In percent of GDP, unless otherwise indicated) Fiscal Sector Revenue 24.4 22.3 18.1 21.3 23.1 23.7 Expenditure 29.1 31.2 28.8 29.7 30.7 31.0 Overall balance (financing side) (8.5) (9.8) (10.7) (8.8) (7.9) (7.3) Net equity acquisition 0.0 0.0 (2.4) (0.3) 2.2 1.2 Net domestic financing 7.0 8.2 (11.1) 5.0 4.4 3.6 Net external financing 1.5 1.6 24.2 4.1 1.1 2.4

Government Debt(2) (at year end) 24.9 39.0 67.1 73.2 68.1 69.9 External(2) 15.4 18.5 46.8 53.4 50.8 64.5 Domestic 9.5 20.4 20.3 19.8 17.3 16.5

External Sector Current account balance (7.8) (16.5) (5.5) 1.9 (3.5) (8.6) Change in NIR (US$ millions) (150.2) (265.8) 79.4 21.7 147.9 242.4 Gross international reserves - (US$ millions) (at year end) 625.1 330.2 381.1 424.4 580.7 823.1 - in months of imports of goods and services (months) 2.7 1.5 2.7 2.8 3.3 4.0 ______(1) WGFP and IMF forecast for 2019. (2) Forecasted external debt as of December 31, 2019 assumes the issuance of US$150 million in aggregate principal amount of the Notes under the terms described in this Offering Memorandum. The actual amount of Notes issued may be different. Sources: IMF and WGFP. GDP data for 2019 forecasted by WGFP.

3 THE OFFERING

Issuer ...... The Republic of Suriname.

Issue Amount ...... US$125,000,000 aggregate principal amount.

Issue Price...... 95.000422% of the principal amount of the Notes, plus accrued interest, if any, from December 20, 2019.

Issue Date ...... December 20, 2019.

Payment Dates ...... June 30 and December 30 of each year, commencing on June 30, 2020 (each a “Payment Date”).

Maturity Date ...... Unless previously repurchased, cancelled or redeemed, principal of the Notes will be repaid in eight semi-annual installments as set forth herein commencing on June 30, 2020, with a final maturity on December 30, 2023.

Principal Payments ...... On each Payment Date, the Republic will make a principal repayment of US$15,000,000 (the “Scheduled Amortization Amount”), and, in addition to payment of the Scheduled Amortization Amount due on such Payment Date, the Republic shall also repay a portion of principal of the Notes equal to the amounts on deposit in the additional amortization account as of the immediately preceding interest payment date for the 2026 Notes (with respect to any Payment Date, the “Excess Amount”). The Scheduled Amortization Amount will be adjusted in certain circumstances as described in “Description of the Notes.” See “Description of the Notes—Principal, Maturity and Interest.”

Interest ...... The Notes will bear interest from and including the Issue Date at the rate of 9.875% per annum payable semi-annually in arrears on each Payment Date.

Escrow Account ...... On the Issue Date, the net proceeds from the offering of the Notes will be deposited into an escrow account (the “Escrow Account”) maintained by the Escrow Agent pursuant to an escrow agreement. Funds on deposit in the Escrow Account may be invested in Cash Equivalents (as defined in the Indenture) at the direction of the Republic.

Upon receipt by the Escrow Agent of a duly completed withdrawal certificate substantially in the form of the withdrawal certificate to be attached to the escrow agreement and signed on behalf of the Republic and Suralco certifying that the transfer of Afobaka HPP to SPCS has occurred, (i) a specified amount of the funds on deposit in the Escrow Account will be paid to, or at the written direction of, Suralco and (ii) the balance of the funds remaining in the Escrow Account, if any, will be distributed to the Republic at its written direction.

4 Dam Transfer Mandatory Redemption ...... If a duly completed and signed withdrawal certificate in relation to the Escrow Account has not been delivered to the Escrow Agent on or prior to the date that is 90 days after the Issue Date, then the Republic will be obligated to redeem the Notes in full at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to (but excluding) the date of redemption (the “Mandatory Redemption Price”). The funds available in the Escrow Account will be used by the Republic to pay a portion of the Mandatory Redemption Price. See “Description of the Notes—Mandatory Redemption.”

Liquidity Event Mandatory Redemption ..... If the Republic incurs certain additional indebtedness in a principal amount equal to or exceeding the then outstanding aggregate principal amount of the Notes or sells (or otherwise monetizes) any portion of its interest in any joint venture with IAMGOLD Corporation (each, a “Liquidity Event”), the Republic shall redeem the Notes at the Mandatory Redemption Price with the aggregate net proceeds of such Liquidity Event. See “Description of the Notes—Mandatory Redemption.”

Withholding Tax; Additional Amounts Principal of and interest on the Notes are payable by the Republic without withholding or deduction for or on account of taxes imposed by Suriname to the extent described herein. In the event that the Republic is required by law to deduct or withhold taxes, duties, assessments or governmental charges, the Republic will pay additional amounts as necessary to enable holders of Notes to receive such amounts after such deduction or withholding as they would have received absent such deduction or withholding, subject to certain exceptions. See “Description of the Notes—Additional Amounts.”

Ranking ...... The Notes will constitute general, direct, unconditional, unsubordinated and unsecured Indebtedness (as described herein) of the Republic and will rank pari passu, without any preference among themselves, with all other unsubordinated obligations of the Republic, present or future, constituting Public External Indebtedness of the Republic. The Republic has pledged its full faith and credit for the due and punctual payment of all amounts due in respect of the Notes. Neither the Escrow Account nor the accounts under the Accounts Agreement will constitute collateral for the Notes.

5 Cash Flow Arrangements ...... The Republic will be required to ensure that all dividends paid to the Republic by Staatsolie Maatschapij Suriname N.V. (“Staatsolie”), which is wholly-owned by the Republic, will be paid in U.S. dollars directly into the Collection Account (as defined below) without deductions, offsetting or settlements against any liabilities of the Republic owed to Staatsolie. In addition, within 90 days from the Issue Date, the Republic is required to obtain the agreement from the joint ventures in relation to the Rosebel gold mine concession, the Saramacca gold mine concession and the Bronkolonko gold mine concession (collectively, the “IAMGOLD Joint Ventures”) to make payments directly into the Collection Account of (i) all royalty payments owed to the Republic by such IAMGOLD Joint Venture, and (ii) all payments owed to the Republic, or any entity controlled by the Republic, by such IAMGOLD Joint Venture pursuant to any power purchase agreements between the parties (the “Cash Flow Condition”).

For so long as the Cash Flow Condition has not been satisfied, the Republic will be required to deposit any of the foregoing payments it receives into the Collection Account and to cause any relevant entity controlled by the Republic to deposit any payments received from any IAMGOLD Joint Venture pursuant to any power purchase agreements into the Collection Account in U.S. dollars. For more information, see “Description of the Notes—Accounts Agreement.”

Additional Interest ...... If the Republic fails to satisfy the Cash Flow Condition on or prior to the date that is 90 days after the Issue Date (a “Payment Instruction Failure”), the interest rate on the Notes shall be increased by 3.0% per annum. Following a cure of the Payment Instruction Failure, the interest rate on the Notes will be reduced to the original interest rate applicable to the Notes as of the Issue Date.

6 Accounts Agreement ...... The Accounts Agreement will provide for the establishment and maintenance by the Account Bank of the following accounts located outside the Republic for the deposit of U.S. dollars: a collection account (the “Collection Account”), a debt service account for the Notes (the “Notes Debt Service Account”), a debt service account for the 2026 Notes (the “2026 Notes Debt Service Account” and, together with the Notes Debt Service Account, the “Debt Service Accounts”), and an additional amortization account (the “Additional Amortization Account”).

Pursuant to transfer instructions required to be issued by the Republic on the date that is 10 calendar days prior to each Payment Date (each, a “Transfer Instruction Date”) in accordance with the Accounts Agreement, the Account Bank will transfer amounts on deposit in the Collection Account periodically in the following order of priority: (A) if the Transfer Instruction Date to which such Transfer Certificate relates is immediately prior to a 2026 Notes Payment Date, (i) first, to the 2026 Notes Debt Service Account until the amount on deposit in the 2026 Notes Debt Service Account is equal to the 2026 Notes Debt Service Requirement payable on such 2026 Notes Payment Date, then (ii) second, to the Notes Debt Service Account until the amount on deposit in the Notes Debt Service Account is equal to the Notes Debt Service Requirement on the next Notes Payment Date, then (iii) third, to the Additional Amortization Account, and (B) if the Transfer Instruction Date to which such Transfer Certificate relates is immediately prior to a Notes Payment Date, (i) first, to the Notes Debt Service Account until the amount on deposit in the Notes Debt Service Account is equal to the Notes Debt Service Requirement payable on such Notes Payment Date, then (ii) second, to the 2026 Notes Debt Service Account until the amount on deposit in the 2026 Notes Debt Service Account is equal to the 2026 Notes Debt Service Requirement on the next 2026 Notes Payment Date (all in accordance with such Transfer Certificate). Funds not transferred pursuant to the foregoing order of priority will be retained in the Collection Account until the next succeeding Transfer Instruction Date, after which such amounts will be applied in the above order of priority.. If, prior to any Payment Date, the Republic determines that the combined funds on deposit in the Collection Account and the applicable Debt Service Account will not be sufficient to pay the Notes Debt Service Requirement or the 2026 Notes Debt Service Requirement payable on such Payment Date, as applicable, the Republic will transfer additional funds to the Collection Account so that the full payment due on such Payment Date can be made.

7 Notes Debt Service Requirement (in the case of the 2026 Notes) payable on such Payment Date, the Republic will instruct the Account Bank in writing no earlier than five Business Days nor less than three Business Days prior to such Payment Date to liquidate and Cash Equivalents necessary and to transfer an amount (if available) from the Collection Account to such Debt Service Account equal to the difference between the amount on deposit in such Debt Service Account and the Notes Debt Service Requirement or the 2026 Notes Debt Service Requirement, as applicable, for such Payment Date. If the amount then on deposit in the Collection Account is not sufficient to satisfy such difference, then the Republic will transfer additional funds to the Collection Account in order to make up such deficiency. In addition, the Republic will instruct the Account Bank no less than three Business Days prior to any Notes Payment Date or other applicable redemption date, to transfer the Excess Amount, if any, applicable to such Notes Payment Date or other applicable redemption date, from the Additional Amortization Account to the Trustee, or the paying agent for the Notes, in order to make an additional repayment of principal of the Notes on such Notes Payment Date or other applicable redemption date.

Negative Pledge and Certain Covenants...... The Notes contain certain covenants, including a restriction on the creation or subsistence of any Lien (as defined herein) securing Public External Indebtedness. These covenants are, however, subject to significant exceptions. See “Description of the Notes.”

Use of Proceeds ...... The gross proceeds from the issuance of the Notes will be US$118.75 million (after giving effect to original issue discount). The net proceeds from the issuance and sale of the Notes, after deduction of the commissions payable by the Republic to the Initial Purchaser and the net fees and expenses payable by the Republic, are expected to be approximately US$111.6 million. The Republic intends to use the net proceeds from the offering to settle amounts owed to Suralco in relation to the transfer of the Afobaka hydropower plant. See “Use of Proceeds.”

Collective Action Clauses ...... The Notes will contain provisions, commonly known as “collective action clauses,” regarding acceleration and voting on future amendments, modifications and waivers. Under these provisions, which are described in the section entitled “Description of the Notes—Modifications, Amendments and Waivers—Collective Action,” the Republic may amend or obtain waivers of the payment provisions of the Notes and certain other terms with the consent of holders of a specified percentage of the aggregate principal amount of the outstanding Notes. Such collective action clauses include a single-limb voting aggregation feature that allows for aggregation of votes across multiple series of the Republic’s outstanding debt securities if certain criteria are met.

Form of Notes ...... The Notes will be issued in the form of global notes without coupons, registered in the name of a nominee of DTC.

Denominations ...... Each Note will be issued in minimum denominations of US$200,000 and integral multiples of US$1,000 in excess thereof.

8 No Further Issues ...... The Indenture will limit the aggregate principal amount of the Notes that may be issued to the amount offered hereunder.

Listing and Trading ...... Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to admit the Notes to trading on the Euro MTF market.

Governing Law ...... The Notes, the Indenture and the Accounts Agreement will be governed by, and construed in accordance with, the laws of the State of New York, United States of America.

Transfer Restrictions ...... The Notes have not been registered under the Securities Act. As a result, the Notes are subject to limitations on transferability and resale. For more information, see “Transfer Restrictions.”

Trustee, Registrar, Paying Agent and Wilmington Trust, National Association. Transfer Agent ......

Account Bank ...... Wilmington Trust, National Association.

9 RISK FACTORS

Investing in the Notes involves risks. We believe the following risks and uncertainties may adversely affect the market value of the Notes or our ability to fulfill our obligations under the Notes. You should carefully consider the risks described below and the other information contained in this Offering Memorandum before making an investment decision. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties not currently known to us or that we currently do not believe are material may also adversely affect us.

Risks Relating to Suriname

Suriname’s economy and fiscal balance are dependent on production of, and global demand and prices for, the main commodities it produces.

The Surinamese economy is highly concentrated in the extractive industries and their related manufacturing activities. These sectors play a key role in driving economic growth, employment and fiscal revenue.

Gold and oil are the principal commodities produced in Suriname. Alumina production had historically been an important contributor to the Surinamese economy until production in Suriname ceased in 2015.

The mining and quarrying sector, which principally includes oil and mineral ore extraction operations, and the manufacturing sector, which principally includes oil refining and mineral ore milling and processing, together accounted for 25.8% of Suriname’s GDP in 2018. Exports of gold and petroleum products collectively accounted for approximately 87.9% and 86.3% of total exports in 2017 and 2018, respectively. In addition, traditionally a significant amount of fiscal revenue in Suriname has been derived from companies in the gold and oil sectors. In 2018, approximately 35.7% of Suriname’s fiscal revenue was derived from the gold and oil sectors.

The prices of gold and oil have fluctuated significantly in the international commodities markets, causing fluctuations in Suriname’s fiscal revenues and exports. In particular, Suriname was materially adversely affected by the sharp decline from 2013-2016 in international prices for the main commodities it produces, gold, and oil, and the closure of the country’s remaining alumina production facility in 2015. These events led to sharp decreases in export revenue and fiscal revenue, declining international reserves and substantial external current account and fiscal deficits in 2014-2018.

Gold. Gold mining is important to Suriname’s economy and public sector finances, accounting for 76.6% of exports and 13.3% of fiscal revenue in 2018. State-owned company Staatsolie Maatschappij Suriname N.V. (“Staatsolie”) owns a 25% equity interest in the Merian gold mine and the Government owns a 5% equity interest in the Rosebel gold mine. Suriname’s revenue from gold has experienced fluctuations as a result of changes in the international commodities markets and this can be expected to occur in the future. Historically, international prices for gold have fluctuated widely. The factors that may affect the price of gold include industry factors such as: industrial and jewelry demand; the level of demand for the metal as an investment; central bank lending, sales and purchases of the metal; speculative trading; and costs of and levels of global production by producers of the metal. Gold prices may also be affected by macroeconomic factors, including: expectations of the future rate of inflation; the strength of, and confidence in, the U.S. dollar, the currency in which the price of the metal is generally quoted, and other currencies; interest rates; and global or regional political or economic uncertainties. Future declines in international gold prices could adversely affect the Surinamese economy, fiscal accounts and international reserves. The Government does not currently engage in any hedging arrangements regarding the price of gold. A steep and long lasting decline in international gold prices could also render commercial exploration of Suriname’s gold reserves uneconomical.

Oil. The Government receives fiscal revenue from state-owned oil company Staatsolie in the form of taxes and dividends. Staatsolie’s revenues presently have a strong positive correlation with the movement of international oil prices. Historically, international prices for crude petroleum have fluctuated widely as a result of many factors. These factors include: global and regional economic and geopolitical developments in crude oil producing regions, particularly the Middle East and Africa; the ability of the Organization of Petroleum Exporting Countries to set and maintain crude oil production levels and maintain certain price levels; global and regional supply and demand for

10 crude oil, oil products and natural gas; global financial crises, such as the global economic crisis of 2008; competition from other energy sources; domestic and foreign government regulations; and weather conditions. The effects of fluctuations in international oil prices on Staatsolie’s revenues have been reduced as a result of the beginning of full operations at Staatsolie’s expanded oil refinery, which was completed in December 2015. However, Suriname can provide no assurances that Staatsolie’s revenues will not experience fluctuations as a result of changes in the international oil markets or for other reasons. A decline in international oil prices or a deterioration in Staatsolie’s financial condition for any reason could have an adverse effect on the dividends that the Government receives from Staatsolie and on the Government’s fiscal accounts. This in turn could have a material adverse effect on Suriname’s ability to make payments on its outstanding public debt, including the Notes.

Alumina. Alumina was historically an important contributor to the Surinamese economy. However, due to an international decline in alumina prices and continued oversupply in world markets, alumina production and exports decreased substantially beginning in 2008. The sector operated at a low level of production and profitability in recent years, and in December 2015 alumina production in Suriname ceased with the closure of the last part of the Alcoa alumina refinery, with Alumina exports from Suriname ceasing in early 2016.

While the Republic has been taking steps to diversify its economy and reduce the dependence of its fiscal revenues on commodity production and prices, there can be no assurance that these efforts will be successful. Significant or continuous reductions in Suriname’s production of, and/or fluctuations in the international prices of, these commodities could have a material adverse effect on Suriname’s ability to make payments on its outstanding public debt, including the Notes.

The Republic has an increasing level of public indebtedness and could have difficulty servicing its debt.

Suriname’s debt has increased significantly over the past several years. Suriname historically maintained a low debt-to-GDP ratio, but the 2015 commodity price shock led to a sharp increase in the debt-to-GDP ratio from 29% in 2014 to 64.6% in 2016 to 68.5% in 2018. Large fiscal deficits, currency depreciation, and weak economic growth have been the main causes of the increase in debt. Significant components of the increase in 2016 were the issuance by Suriname in October 2016 of its US$550 million 9.25% Notes due 2026 and the decline in GDP (in US$ terms) by 42.7% between 2014 and 2016.

Suriname may not be able to meet future debt service obligations out of current revenues and it may have to rely in part on additional financing from the domestic and international capital markets (or multilateral or bilateral sources) in order to do so. In the future, Suriname may not be able or willing to access such markets or sources of funding, and Suriname’s ability to service its public debt, including the Notes, may be adversely affected.

Future political support for current economic policies, including reform of the electricity sector and servicing of Suriname’s outstanding public debt, cannot be assured.

Suriname’s economy and public finances were materially adversely affected by the sharp decline in international commodity prices which began in 2013. In response to such developments, the Government began implementing a major economic reform program in August 2015. Elements of the program included the phased elimination of electricity subsidies and gradual increases in electricity tariffs, which has resulted in significant increases in electricity costs for the Surinamese population and businesses. The elimination of subsidies is part of a broader reform of the electricity sector which is planned by the Government.

While Suriname’s governing coalition currently controls at least 26 out of the 51 seats in the National Assembly, a lack of sufficient political support for Suriname’s economic reform program could lead to changes in the composition of the Government. Changes in the composition of the National Assembly or other political developments could lead to a shift in Government economic policies that could affect the ability of the Government to implement its planned reform of the electricity sector or the proportion of Suriname’s budget devoted to public debt payments or could have other adverse effects on Suriname’s ability to meet its outstanding public debt obligations in the future, including its obligations under the Notes.

11 The ability of Suriname to sustain or increase its present levels of gold production is dependent in part on the success of gold mining projects in the country, which are subject to numerous known and unknown risks.

The ability of the Republic to sustain or increase its present levels of gold production is dependent in part on the success of gold mining projects in the country. Risks and unknown factors inherent in all gold mining projects include, but are not limited to, the accuracy of reserve estimates, metallurgical recoveries, capital and operating costs of such projects, and the future prices of the relevant minerals. The capital expenditures and time required to develop new mines or other projects are considerable and changes in costs or construction schedules can affect project economics. It is not unusual in the mining industry for new mining operations to experience unexpected problems during the start-up phase, resulting in delays and requiring more capital than anticipated. Actual costs and economic returns may differ materially from the Government’s estimates and those of the companies operating in Suriname. In addition, the success of the gold mining projects in Suriname are dependent on the commitment of the international gold mining companies that operate the projects, and Suriname’s maintaining positive relationships with such companies.

Suriname’s proven metal ore and oil reserves and resources are estimates, and no assurance can be given that the estimated reserves and resources are accurate or that the indicated level of metal or oil will be produced.

Reserves are statistical estimates of mineral content and ore based on limited information acquired through drilling and other sampling methods and require judgmental interpretations of geology, structure, grade distributions and trends, and other factors. Successful extraction requires safe and efficient mining and processing. Suriname’s mineral reserves and mineral resources are estimates, and no assurance can be given that the estimated reserves and resources are accurate or that the indicated level of metal will be produced. Actual mineralization or formations may be different from those predicted. Further, it may take many years from the initial phase of drilling before production is possible, and during that time the economic feasibility of exploiting a discovery may change. Mineral resource estimates for properties that have not commenced production are based, in many instances, on limited and widely spaced drill hole information, which is not necessarily indicative of the conditions between and around drill holes. Accordingly, such mineral resource estimates may require revision as more drilling information becomes available or as actual production experience is gained. All or any part of Suriname’s mineral resources may not constitute, or may not be converted into, reserves. Market price fluctuations of gold, alumina, as applicable, as well as increased production and capital costs, reduced recovery rates or technical, economic, regulatory or other factors may render Suriname’s proven and probable reserves uneconomical to develop at a particular site or sites for periods of time or may render mineral reserves containing relatively lower grade mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves, such as the need for the orderly development of ore bodies or the processing of new or different ore types, may cause mineral reserves to be reduced. Estimated reserves may have to be recalculated based on actual production experience. Any of these factors may require the mining companies to reduce their estimates of mineral reserves and resources. In addition, companies operating in Suriname may not achieve indicated levels of gold, oil or bauxite recovery or obtain the prices for gold, oil or bauxite production assumed in determining the amount of such reserves. Levels of production may also be affected by weather or supply shortages.

Suriname is dependent on obtaining future debt financing, which may not be available on favorable terms or at all.

Suriname is dependent on obtaining future debt financing, in addition to the Notes, for the continuing implementation of its economic reform program and for budget financing. There can be no assurance that Suriname will be able to obtain other financing in the future on acceptable terms or at all. A failure of Suriname to receive financing in the future could have a material adverse effect on Suriname’s economy and fiscal position and its ability to meet its obligations under the Notes.

12 Political and social developments in Suriname could have a material adverse effect on the Surinamese economy and on Suriname’s ability to make payments on its outstanding public debt, including the Notes.

Suriname experienced social and political turmoil in the 1980s and 1990s such as conflicts among ethnic minorities, guerrilla groups in the countryside, coup d’états and military dictatorships, all of which undermined Suriname’s policy predictability and economic stability.

In 1980, the democratically elected government was overthrown in a military coup by led by Suriname’s current president, Desiré Delano Bouterse, who was then a Sergeant Major in the army. In 2007, Mr. Bouterse was brought to trial in Suriname in connection with the killing of 15 prominent civilian dissidents of Mr. Bouterse’s military government on December 8, 1982 (the “December Murders”). This trial was ongoing in 2010 when Mr. Bouterse was elected president of Suriname. In addition, in 1999, Mr. Bouterse was convicted in absentia of cocaine trafficking by a Dutch court. This conviction resulted in an arrest order by the International Criminal Police Organization (“Interpol”) against Mr. Bouterse which is no longer outstanding. After being elected president in 2010, however, President Bouterse received immunity from arrest as a head of state. In April 2012, the National Assembly extended the time period of the amnesty law passed by the previous government to cover the time period during which President Bouterse allegedly committed his crimes, effectively granting amnesty to President Bouterse and others on charges related to the December Murders. In November 2015, the Court of Justice ruled that the Suriname Public Prosecutor must try President Bouterse as a suspect in the December Murders trial. In June 2016, President Bouterse blocked the resumption of the December Murders process, on the basis of Article 148 of the Surinamese Constitution, which states that the president can stop the prosecution of a suspect “in the interest of state security in concrete cases.” In January 2017, a court in Suriname directed that the trial be recommenced, and such trial proceeding ended on November 30, 2018. On November 29, 2019, the court returned a verdict of guilty and awarded a sentence of 20 years in prison. President Bouterse has the right to appeal the verdict and he continues to hold the position of President. The next general election is scheduled to be held in May 2020.

Worsening changes in the political and social environment in Suriname could have a destabilizing effect on the Government, which could adversely affect the Surinamese economy and Suriname’s ability to make payments on its outstanding public debt, including the Notes.

The Surinamese dollar is subject to volatility and depreciation.

The depreciation of the Surinamese dollar against the U.S. dollar or other foreign currencies may adversely affect the financial condition of Suriname, as well as Suriname’s ability to repay its debt denominated in currencies other than the Surinamese dollar, including amounts due under the Notes. The SRD was de facto pegged to the U.S. dollar until March 2016, when the CBvS shifted to a flexible exchange rate regime. Suriname’s mineral exports are denominated in U.S. dollars in international markets. As result, any significant change in the value of the SRD or the currency of Suriname’s major trading partners, against the U.S. dollar or other major currencies could adversely affect the Surinamese economy and financial condition. The SRD depreciated from SRD 3.35 per U.S. dollar in October 2015 to SRD 7.42 per U.S. dollar on December 31, 2016 and further to SRD 7.52 per U.S. dollar on December 31, 2018. As of September 30, 2019, the indicative SRD:US$ rate was SRD 7.52 per U.S. dollar, while the cash spot rate was approximately SRD 7.85 per U.S. dollar. The initial sharp depreciation was comparable to that of most commodity exporters in the region in the aftermath of the international commodity price declines that occurred since 2013. The value of the SRD is impacted by a number of factors that are outside of the Republic’s control. While the foreign exchange regime has fundamentally changed since 2015, there can be no assurance that political events such as elections could trigger exchange rate volatility. Furthermore, there can be no assurance that there will not be further depreciation as a result of external factors. There is a risk that the depreciation of the SRD could result in reduced fiscal revenue or outflows of capital from Suriname, each of which could have a material adverse effect on Suriname’s economy.

13 Inflation volatility could have a material adverse effect on the Republic’s economic prospects.

The Republic has experienced volatile inflation rates in recent years as a result of exchange rate changes and, to a certain extent, fiscal policy measures. An increase in inflation contributes to significant uncertainty regarding future economic growth. In November 2015, monthly inflation increased sharply to 15.6% due to the Government’s phased elimination of electricity subsidies. Almost all of this inflation increase reflects a one-time 110% increase in “housing and utilities” prices associated with the increase in electricity tariffs in October 2015. This spike in inflation accounted for a large percentage of the 25.1% inflation rate for 2015. After reaching a high of 79.2% in October 2016, inflation has been on a declining trend and decreased to 9.2% in 2017 and to 5.5% in 2018. The 12-month inflation rate was 4.2% as of October 2019. To avoid a repetition of the inflation shock that followed the depreciation of the SRD and other relative price adjustments, the CBvS has tightly controlled domestic liquidity conditions to ensure stability in the foreign exchange market. However, there can be no assurance that inflation rates will return to historical levels and remain stable in the future or that the Republic will implement measures to control inflation. Significant and/or volatile inflation could have a material adverse effect on the Republic’s economic growth and, as a result, its ability to service its debt obligations, including the Notes.

Certain economic risks are inherent in any investment in an emerging market country such as Suriname.

Investing in an emerging market country such as Suriname carries economic risks. These risks include many different factors that may affect Suriname’s economic results, including the following:

 changes in economic or tax policies in Suriname;

 the ability of Suriname to implement key economic reforms;

 general economic and business conditions in Suriname and the global economy;

 the imposition of trade barriers by Suriname’s trade partners;

 the impact of hostilities or political unrest in other countries that may affect international trade, commodity prices and the global economy;

 the decisions of international financial institutions regarding the terms of their financial assistance to Suriname;

 the imposition of wage, price or exchange controls by the Government;

 interest rates in the United States and financial markets outside Suriname; and

 exchange rate volatility.

Any of these factors, as well as volatility in the markets for securities similar to the Notes, may adversely affect the liquidity of, and trading markets for, the Notes.

Suriname is vulnerable to climatic or geological disasters.

Suriname is vulnerable to climatic disasters, especially flooding due to rising sea levels or excess rainfall. Suriname is also vulnerable to the effects of global climate change. Suriname may, at irregular and unpredictable intervals, suffer the effects of severe storm damage. The occurrence of such a disaster could have a material adverse effect on Suriname’s economy and its ability to make payments on the Notes.

14 Any revision to our official financial or economic data resulting from any subsequent review of such data by the CBvS or other Government entities could have a material adverse effect on the final results for that period.

Certain financial and economic information presented in this Offering Memorandum may be subject to revision and subsequently be materially adjusted or revised to reflect new or more accurate data as a result of the periodic review of our official financial and economic statistics. Such revisions could reveal that our economic and financial conditions as of any particular date are materially different from those described in this Offering Memorandum. We can offer no assurance that such adjustments or revisions will not have a material adverse effect on the interests of our creditors, including any purchasers of the Notes.

The ratings of Suriname may be lowered or withdrawn.

On April 18, 2019, Standard & Poor’s Ratings Services (“S&P”) affirmed the long-term sovereign credit ratings of Suriname at “B” with a Stable outlook. On February 28, 2019, Moody’s Investors Service (“Moody’s”) affirmed the Republic’s sovereign credit ratings at “B2,” changing the outlook from Negative to Stable. On August 21, 2019, Fitch Ratings affirmed the long-term sovereign credit ratings of Suriname at “B” and revised the outlook from Stable to Negative.

These ratings address the creditworthiness of Suriname and the likelihood of timely payment of Suriname’s long-term government debt. Ratings are not a recommendation to purchase, hold or sell securities and may be changed, suspended or withdrawn at any time. Each rating should be evaluated independently of the others. Detailed explanations of the ratings may be obtained from the respective rating agencies. The Republic’s current ratings and the ratings outlook currently assigned to the Republic are dependent upon economic conditions and other factors affecting credit risk that are outside the control of the Republic. Any adverse change in the Republic’s credit ratings could adversely affect the trading price for the Notes.

Risks Relating to the Notes

An active trading market may not develop for the Notes, which may hinder your ability to liquidate your investment, and the price at which the Notes will trade in the secondary market is uncertain.

Suriname has been advised by the Initial Purchaser that it intends to make a market in the Notes but it is not obligated to do so and may discontinue market making at any time without notice. The Notes will be a new issue of securities with no established trading market. Application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to admit the Notes to trading on the Euro MTF market of such exchange. No assurance, however, can be given as to the liquidity of the trading market for the Notes, should it develop. The price at which the Notes will trade in the secondary market is uncertain. In addition, the liquidity of the trading market in the Notes, and the market price quoted for the Notes, may be adversely affected by changes in the overall market for fixed income securities and by changes in the general economic conditions in Suriname and elsewhere. As a result, we cannot assure you that an active trading market will develop or be sustained for the Notes. If no active trading market develops, you may not be able to resell your Notes at their fair market value or at all.

The Notes will contain provisions that permit Suriname to amend the payment terms without the consent of all holders.

The Notes will contain provisions, commonly known as “collective action clauses,” regarding acceleration and voting on future amendments, modifications and waivers that differ from those applicable to some of the Republic of Suriname’s outstanding Public External Indebtedness. Under these provisions, which are described in the section entitled “Description of the Notes—Modifications, Amendments and Waivers—Collective Action,” the Republic of Suriname may amend or obtain waivers of the payment provisions of the Notes and certain other terms with the consent of holders of a specified percentage of the aggregate principal amount of the outstanding Notes. Such collective action clauses include a single-limb voting aggregation feature that allows for aggregation of votes across multiple series of our outstanding debt securities if certain criteria are met.

15 The ability of holders to transfer Notes in the United States and certain other jurisdictions will be limited.

The Notes will not be registered under the Securities Act and, therefore, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable U.S. state securities laws. Offers and sales of the Notes may also be subject to transfer restrictions in other jurisdictions. You should consult your legal advisors for advice concerning applicable transfer restrictions with respect to the Notes.

Suriname is a sovereign state and, accordingly, it may be difficult to obtain or enforce judgments against us.

Suriname is a sovereign state. As a result, it may be difficult or impossible for investors to obtain or enforce judgments against Suriname, whether in an investor’s own jurisdiction or elsewhere. In particular, the Government has been advised by its Surinamese counsel that foreign judgments, including in respect of civil liabilities predicated upon applicable securities laws, cannot be enforced in Suriname unless there is a bilateral or multilateral treaty in force regarding the reciprocal recognition of judgments. Suriname currently has such a treaty only with the Netherlands. Even if an applicable treaty were in effect, the recognition and enforcement of a foreign judgment in Suriname will in all cases be subject to exceptions and limitations provided for in the laws of Suriname, including, for example, that assets that are meant for public service cannot be seized. Absent a treaty regarding reciprocal recognition of judgments, in order for a foreign judgment to be enforceable in Suriname, the case will need to be submitted to a Surinamese court, which will reconsider the merits of the case. Such a submission will require, among other things, the translation into Dutch of all documents related to the foreign judgment. As a result, it may be difficult to obtain recognition or enforcement in Suriname of a foreign judgment in respect of the Notes. See “Enforcement of Civil Liabilities.”

Funds held in escrow prior to completion of the transfer of the Afobaka hydropower plant and funds on deposit in the Collection Account and the Debt Service Accounts do not constitute collateral.

The net proceeds from the offer and sale of the Notes will initially be deposited into an escrow account maintained by an escrow agent. See “Description of the Notes—Escrow Account.” The funds in escrow will only be released to the Republic and Suralco upon completion of the transfer of the Afobaka hydropower plant to SPCS or another state-owned entity. Neither the escrow account nor the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited in the escrow account will constitute collateral securing the Notes. If the Republic were to default on its other obligations prior to the time such funds are released from escrow then such funds could be subject to claims of competing creditors, and thus might not be available to the Republic to make the mandatory redemption required under the Indenture. See “Description of the Notes—Mandatory Redemption.”

Furthermore, none of the Collection Account or the Debt Service Accounts or the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited in such accounts will constitute collateral securing the Notes. If the Republic were to default on its other obligations then such funds could be subject to claims of competing creditors, and thus might not be available to the Republic to make payments of interest and principal with respect to the Notes.

16 USE OF PROCEEDS

The gross proceeds from the issuance of the Notes will be US$118.75 million (after giving effect to original issue discount). The net proceeds from the issuance and sale of the Notes, after deduction of the commissions payable by the Republic to the Initial Purchaser and the net fees and expenses payable by the Republic, are expected to be approximately US$111.6 million. The Republic intends to use the net proceeds from the offering to settle amounts owed to Suralco in relation to the transfer of the Afobaka hydropower plant.

The payment to Suralco represents arrears owed by the Government to Suralco for energy provided to the Government for which the Government has not yet paid as well as Suralco’s future profits as though it had been operating the plant through December 31, 2019. See “Annex A: Electricity Sector Reform” for more information regarding the application of the use of proceeds for the reform of the electricity sector.

17 THE REPUBLIC OF SURINAME

Territory, Population and Society

Suriname is located in the middle of the Amazon region and approximately 95% of Suriname is forested and covered mainly by untouched tropical rainforest. According to the World Economic Forum (based on World Bank data as of 2016), Suriname is the most-forested country in the world by percentage of total land area. Only 5% of Suriname’s land along its coastline is developed and the hinterlands are mostly uninhabited. Suriname’s forests are among the most untouched on the planet and contain 3,165 million metric tons of carbon in living forest biomass, as well as more than 1,100 known unique species of amphibians, birds, mammals and reptiles. The country is also home to at least 5,000 species of vascular plants. In the upper watershed of the Coppename River lies the Central Suriname Nature Reserve, a pristine tropical forest. This reserve was added by the United Nations Educational Scientific and Cultural Organization (“UNESCO”) to its list of World Heritage sites in 2000.

Suriname has a humid and tropical climate with two seasons: rainy and dry. The rainy season runs from late April to mid-August. Rainfall is highest in the central and southeastern parts of the country. Heavy rains have caused, and may continue to cause, floods in the interior of Suriname. In recent history, Suriname has suffered two major floods. In May 2006, heavy rainfall and resultant flooding in the interior of Suriname left thousands homeless. In May 2008, constant rainfall flooded several villages located on the northern part of the Marowijne River and many people were forced to evacuate to other locations in Suriname or French Guiana. And, in June of that year, heavy rainfall peaked, leading to the overflow of the Tapanahony River and the Marowijne River in southern and eastern Suriname. Approximately 5,000 families, 30% of the livestock, 65% of crops and 90% of the fishing industry in the area were affected.

The Surinamese population is 37% Hindustani, who are descendants of immigrants from northern India; 31% Creole, who are persons of mixed African and European heritage; 15% Javanese; 10% Maroon, who are descendants of African slaves who established independent communities in the interior rainforests; 2% Amerindian; 2% Chinese and 1% European. The majority of the population lives in Paramaribo. In 2002, UNESCO placed the center of Paramaribo on its list of World Heritage sites because of its historic and cultural significance.

Suriname has a religiously diverse population. Approximately 48% of the population is Christian, 27% is Hindu, 20% is Muslim, and 5% practice indigenous beliefs. Suriname also has a small Jewish community that traces its origins to the early colonial era.

Approximately 95% of the population of the country is literate. Education is free and compulsory for children from ages six to 12, and over 90% of the children in the coastal areas attend primary school. There are at least two international schools and several institutions of higher education, including the University of Suriname and the FHR Lim A Po Institute for Social Studies.

18 The following table sets forth selected comparative social indicators for Suriname and certain selected other countries.

Selected UNDP Comparative Social Statistics Trinidad and Dominican The United Suriname Tobago Republic Sri Lanka Netherlands States Gross national income per capita (2011 PPP basis) $13,306 $28,622 $13,921 $11,326 $47,900 $54,941 Average life expectancy 71.5 70.8 74.0 75.5 82.0 79.5 Human development index(1) 0.720 0.784 0.736 0.770 0.931 0.924 Mean years of schooling(2) 8.5 10.9 7.8 10.9 12.2 13.4 Expected years of schooling(3) 12.7 12.9 13.7 13.9 18.0 16.5 Gender inequality index(4) 0.441 0.324 0.451 0.354 0.044 0.189

(1) The human development index is a composite index measuring average achievement in three basic dimensions of human development— a long and healthy life, knowledge and a decent standard of living. (2) Average number of years of education received by people ages 25 and older, converted from education attainment levels using official durations of each level. (3) Number of years of schooling that a child of school entrance age can expect to receive if prevailing patterns of age-specific enrolment rates persist throughout the child’s life. (4) The gender inequality index reflects women’s disadvantage in three dimensions—reproductive health, empowerment, and the labor market. The index shows the loss in human development due to inequality between female and male achievements in these dimensions. Sources: Human Development Indices and Indicators 2018 Statistical Update, United Nations

History

Prior to the 16th century, various South American Indians, including Surinen Indians after whom the country is named, occupied the area that is now Suriname. In 1651, England established the first permanent European settlement in Suriname. In 1667, Suriname was seized by a Dutch fleet and that year it was ceded to the Netherlands under the Treaty of Breda that ended the second Anglo-Dutch war. In the same treaty, the Netherlands ceded New Netherland and New Amsterdam (now New York City) to England. In 1954, Suriname became a self-governing constituent country of the Netherlands, and in November 1975 it gained full independence. As independence was highly controversial in Suriname, emigration, mainly to the Netherlands, increased sharply following independence.

In February 1980, after the government’s refusal to sanction trade union activity within the armed forces, the democratically-elected government was overthrown in a military coup led by Desiré Delano Bouterse, who was then a Sergeant Major in the army and is Suriname’s current president. The Netherlands initially supported the new government and agreed to finance an emergency development program to solve the economic crisis. However, relations with the Netherlands were brought to a halt in 1982 because of the December Murders (as described below). Dutch development aid was suspended and the economic crisis deepened.

By the mid-1980s the military regime had opened dialogue with leaders of certain civilian political parties that had been active before the coup. In 1985, a National Assembly was formed and the following year a new Cabinet of Ministers was installed. The military regime remained in power until November 1987, when it was succeeded by a civilian government. On September 30, 1987, a new constitution was approved in a referendum (the “1987 Constitution”).

A mainly ethnic-Maroon guerrilla group led by Ronnie Brunswijk (currently a member of the National Assembly) engaged in an armed conflict with the Government from 1986 to 1989. The civilian government was overthrown by a new military coup in December 1990, and the conflict ended with a peace accord in 1991.

In response to political pressure from the United States, the Netherlands, France and the Organization of American States (“OAS”), elections were held in Suriname on May 25, 1991. The New Front for Democracy and Development and the Suriname Labor Party won a majority of seats in the National Assembly and elected Ronald Venetiaan president. The new government subsequently passed legislation stripping the military of any political

19 power. Jules Wijdenbosch was elected to succeed President Venetiaan in 1996. The following year, the Dutch government issued an arrest warrant for Mr. Bouterse on cocaine trafficking charges. Suriname did not extradite Mr. Bouterse and in 1999 he was convicted in absentia and sentenced to 16 years in prison. This conviction resulted in an arrest order by the International Criminal Police Organization (“Interpol”) against Mr. Bouterse which is no longer outstanding.

President Wijdenbosch presided over a depressed economy and deteriorating social services. Facing protests, President Wijdenbosch called for early elections, which resulted in Mr. Venetiaan’s return to the presidency in 2000. During the second Venetiaan administration, the economy stabilized and improved, the armed forces were depoliticized, and loans were negotiated with the Netherlands and the IDB to finance health, education and social programs. President Venetiaan was reelected in 2005. That year, the Inter-American Court of Human Rights held the government responsible for the murder of 39 Maroons in the village of Moiwana during an anti-government rebellion in 1986.

In 2007, Mr. Bouterse was brought to trial in Suriname in connection with the torture and killing on December 8, 1982 of 15 prominent civilian dissidents of his military government, an incident known as the “December Murders”. This trial was ongoing in May 2010 when Mr. Bouterse’s NDP won a plurality of the seats in elections to the National Assembly, and in July 2010 the United People’s Assembly elected Mr. Bouterse as president of Suriname. After being elected president in 2010, President Bouterse received immunity from arrest as a head of state. Mr. Bouterse’s return to power in 2010 led to a deterioration in relations with the Netherlands, which subsequently froze funding that was owed to Suriname pursuant to a treaty promulgated in connection with Suriname’s independence in 1975 and also suspended training and financial assistance in the security sector.

In April 2012, the National Assembly extended the period of an amnesty law passed by the Venetiaan administration, de facto granting immunity for crimes committed during Mr. Bouterse’s military rule, including for Mr. Bouterse himself in connection with the December Murders and for Ronnie Brunswijk.

In November 2015, the Court of Justice of Suriname ruled that the Public Prosecutor of Suriname must try President Bouterse as a suspect in the December Murders trial. In June 2016, President Bouterse blocked the resumption of the December Murders process, on the basis of Article 148 in the Surinamese Constitution, which states that the president can stop the prosecution of a suspect “in the interest of state security in concrete cases.” In January 2017, a court in Suriname directed that the trial be recommenced and such trial proceeding ended on November 30, 2018. On November 29, 2019, the court returned a verdict of guilty and awarded a sentence of 20 years in prison. President Bouterse has the right to appeal the verdict and he continues to hold the position of President.

See “Risk Factors – Political and social developments in Suriname could have a material adverse effect on the Surinamese economy and on Suriname’s ability to make payments on its outstanding public debt, including the Notes.”

20 Form of Government

Suriname is a representative democracy organized as a presidential republic, with governmental power divided among three independent branches: the executive branch, composed of the president, the vice president and the Council of Ministers; the legislative branch, composed of a 51-member unicameral National Assembly; and the judicial branch, which currently consists of the Court of Justice and three canton courts.

The president of Suriname is both the head of state and head of government. The president is assisted by a vice president. Executive power is vested in the president and the Council of Ministers, which is a 17-minister cabinet, which is appointed by the president and is chaired by the vice president. The president is the chair of the State Council, which advises and reports to the President and includes representatives of labor organizations, the Chamber of Commerce and political parties.

Both the president and vice president are elected by the National Assembly or, if no presidential or vice presidential candidate receives a two-thirds majority in the National Assembly after two rounds of voting, by a simple majority in the broader United People’s Assembly (consisting of 893 representatives from the National Assembly as well as the district and local councils described below), for five-year terms with no term limits. The current president, Desiré Delano Bouterse, was elected in August 2010 by the United People’s Assembly after failing to receive a two- thirds majority in the National Assembly. In May 2015, he was re-elected by the National Assembly. The president and vice president can also be recalled by a two-thirds majority in the National Assembly or by a majority vote in the United People’s Assembly, though such a recall has never occurred.

The legislative branch consists of the National Assembly, a 51-member unicameral chamber. Members of the National Assembly are popularly elected for five-year terms, and have no term limits. Among other powers, the National Assembly has the power to approve all legislation, to elect and recall the president and the vice-president as described above, to pass laws proposed by the president or by its members and to approve the budget proposed by the Ministry of Finance for each year. The National Assembly votes on a simple majority basis, except for amendments to the 1987 Constitution, which require a two-thirds majority.

Legislation must be approved by the National Assembly and signed by the president to become law. The president can exercise de facto veto power over legislation by failing to sign it. International bilateral and multilateral agreements are negotiated and entered into by the president and ratified by the National Assembly.

Local governments were introduced in Suriname under the 1987 Constitution. The local government system consists of 10 administrative districts, each headed by a district commissioner who is appointed, and may be removed, by the president of the Republic. The 10 districts are further divided into 62 “ressorten.” Within Paramaribo, a “ressort” entails a neighborhood, while in other locations it is more akin to a municipality. Districts are represented by a district council, with a district commissioner as the chairman, and “ressorten” are represented by a local council. Members of the district and local councils are popularly elected for five-year terms during the general election. Other than their powers when convened as part of the United People’s Assembly as described above, the district and local councils have little to no legislative power, and can be overruled by the National Assembly. Instead, the district and local councils act primarily as conduits of local concerns from the people to the National Assembly.

General elections are held every five years, during which the entire National Assembly, as well as district and local councils, stand for election. Voting is conducted through each of the 10 individual districts and by party list. District seats are allocated by population. All citizens of at least 18 years of age that are residents of Suriname are eligible to vote. Voting is conducted in person only, except for senior citizens and disabled persons, who may appoint a proxy to vote for them. Voters receive a two-part ballot where they select their party of choice for the National Assembly and for the district and local councils. Election results are typically certified one month after the election. The new National Assembly, district and local councils take power the month after the results are certified. The president and vice-president are typically elected one month after the National Assembly takes power. It therefore generally takes approximately three months after an election for newly elected executive and legislative branches to be in place.

21 Elections are supervised, and their results certified, by an independent national council. Recent elections, including the last election, have been independently monitored by the OAS and the Caribbean Community and Common Market (“CARICOM”), and these organizations have not contested or disagreed with the official results.

National Assembly elections were held on May 25, 2015. The National Democratic Party (“NDP”), headed by President Bouterse, received an absolute majority in the election, which was the first time in Suriname’s history that one political party received an absolute majority in the National Assembly. The National Assembly subsequently re-elected President Bouterse as president on July 14, 2015. Following the election, the NDP approached various parties to form a coalition government. The governing coalition now has a majority of at least 26 out of 51 members. The current composition of the National Assembly by political party is as follows:

Political Party Seats National Democratic Party (NDP) 26 Progressive Reform Party (VHP) 9 National Party Suriname 2 Pertjajah Luhur 3 Alternative Combination (A-Combination) 5 Party for Democracy and Development in Unity 1 Progressive Worker and Farmer’s Union 1

Source: www.gov.sr.

The next general election is scheduled to be held in May 2020.

The judicial branch is headed by the Court of Justice, which supervises the three trial level canton courts and serves as the final and only appellate court. Judges are appointed for life by the Government in consultation with the Court of Justice. The 1987 Constitution also contemplates a Constitutional Court, but such court has yet to be established.

International Relations

Suriname is an active member of a large number of international organizations, including among others: the African, Caribbean and Pacific Group of States (the “ACP Group”); CARICOM; the Community of Latin American and Caribbean States; the Food and Agriculture Organization of the United Nations (“FAO”); the United Nations; the Group of 77 at the United Nations; the IDB; the World Bank Group, including the International Bank for Reconstruction and Development (“IBRD”) and the International Finance Corporation (“IFC”); the International Civil Aviation Organization; Interpol; the International Development Association; the International Federation of Red Cross and Red Crescent Societies; the International Labor Organization; the International Maritime Organization; the IMF; the Islamic Development Bank; the Multilateral Investment Guarantee Agency; the OAS; the Organization of Islamic Cooperation; the Permanent Court of Arbitration; Petrocaribe; the Union of South American Nations (“UNASUR”); UNCTAD; UNESCO; the United Nations Industrial Development Organization; the World Health Organization; the World Intellectual Property Organization; the World Trade Organization (“WTO”); and the Caribbean Development Bank. Suriname held the CARICOM chairmanship during the first half of 2012. Suriname held the presidency of UNASUR from August 30, 2014 to December 4, 2014. Suriname is also currently in the process of joining the Southern Common Market (“MERCOSUR”); a framework agreement was signed in 2013 and approved by the National Assembly in 2014 regarding intensification of integration in the region.

In January 2011, Suriname joined UNASUR. UNASUR was created in 2008 with the aim of promoting regional integration on issues including democracy, education, energy, environment, infrastructure and security. In January 2019, a new group, the Forum for the Progress and Development of South America (PROSUR) was established as a replacement for UNASUR and Suriname was invited to become a member.

Suriname actively participates in the United States-led Caribbean Basin Security Initiative, pursuant to which the two countries cooperate on combatting money laundering, terrorism, gang activity and drug trafficking. Suriname also participates in other United States-led initiatives such as the U.S. President’s Emergency Plan for AIDS Relief,

22 military-to-military cooperation through U.S. Department of Defense funding and ongoing negotiations on an “open skies” agreement to liberalize aviation markets.

Suriname cooperates with French Guiana and Brazil on security measures to combat gang activity and drug trafficking along its borders.

Suriname is involved in long-standing territorial disputes with both Guyana and French Guiana. The dispute with Guyana centers on the Tigri area (New River Triangle), a 6,000-square mile area between two tributaries of the Courantijn River, which the Republic claims as part of Suriname. Border skirmishes occurred between Guyanese and Surinamese forces in 1969. The Surinamese and Guyanese governments agreed in 1971 to withdraw their forces from the Tigri area. Suriname complied with the agreement, but Guyana still maintains a presence in the area. In addition, Suriname also contests its border with Guyana along the Courantijn River. Suriname claims sovereignty over the entire river and views the river’s west bank as the border, while Guyana claims that the deepest channel of the river is the boundary. In 2007, a United Nations international tribunal settled another long-standing boundary dispute between the two countries, in which Suriname was awarded one-third of a disputed area in the Atlantic Ocean. The area in contention with French Guiana is the 5,000 square-mile region between the Litany River and the Marowijne River in the southeastern corner of Suriname.

Suriname accepts compulsory International Court of Justice jurisdiction with some reservations, as well as International Criminal Court jurisdiction.

A dispute between the Republic and the Saramacca people, a Maroon tribe in Suriname, regarding compensation for concessions granted in their territory reached the Inter-American Court of Human Rights, which in 2007 ordered the Republic to conduct proper environmental and social impact assessments for such concessions, as well as to make provisions to ensure proper compensation and participation in the benefits of development to the Saramacca people.

Approximately 350,000 Surinamese are estimated to be living in the Netherlands. In the 19th century, educated, largely Dutch-speaking Surinamese began immigrating to the Netherlands. The Second World War interrupted this trend, but it resumed after the war when Dutch labor demands grew. Immigration to the Netherlands further increased following independence in 1975, the military coup in 1980 and the December Murders in 1982. Suriname is still strongly influenced by the Netherlands, as most Surinamese have relatives living there or have lived there themselves at some point. Notwithstanding the immigration to the Netherlands, neither remittances from Surinamese nationals nor aid from the Netherlands are material contributors to the Surinamese government budget or the balance of payments. The CBvS estimates that a large part of remittances from the Netherlands are converted into U.S. dollars for payment of imports of goods and services into Suriname. Remittances and increasing net immigration from the Netherlands have also contributed to the surge in residential construction activity in the last decade in Suriname.

23 THE SURINAMESE ECONOMY

History and Background

The economy and society of Suriname have been shaped by the history of English and Dutch colonization and by large-scale agriculture, which brought widespread immigration in the late 19th century and early 20th century. These factors have resulted in the ethnically and culturally diverse society Suriname has today.

The Surinamese economy is largely based on mining and related manufacturing activities. The economy and society shifted markedly with the advent of the bauxite industry in 1916. Alcoa established a subsidiary in Suriname and began extracting bauxite, and the industry evolved rapidly after the outbreak of the Second World War. The bauxite industry, including its related alumina and aluminum industries, created a steady and significant source of income for the Republic and it was also the primary driver of growth in the construction, manufacturing and service sectors in Suriname. However, the dominance of the bauxite industry, along with a dependence on financial support from the Netherlands, led to a largely undiversified economy.

During the 1990s, Suriname was affected by the volatility of the international price of aluminum and alumina. This volatility was magnified by the Government’s macroeconomic policy responses, which, during that decade, significantly amplified the effects of changes in the levels of aluminum and alumina exports, leading to boom and bust cycles and two periods of near hyperinflation.

Beginning in 2000, stability-oriented macroeconomic policies adopted by the Government increased confidence in the economy, leading to growing investment, domestic economic activity and employment. The growth- oriented policies also supported economic growth at the time when foreign financial support from the Netherlands ended. As an exporter of gold, oil, and alumina, Suriname benefited from increases in commodity prices and export volumes. Between 2004 and 2014, real GDP grew by an average of 4.5% per year, one of the highest economic growth rates in Latin-America and the Caribbean over this period. Significant gold exports began with the establishment of a subsidiary of the Canadian gold mining company IAMGOLD Corporation in 2006 and a large number of small domestic gold mining companies around this time. After 2010, growth in the Surinamese economy was driven by investment in petroleum refining and gold mining, which helped diversify Suriname further from its former reliance on alumina exports. During this period, gold and oil exports resulted in increased exports and fiscal revenue, while reducing revenue volatility.

Recent Developments in the Economy

The sharp decline in exports beginning in 2013, followed by a contraction in government expenditure beginning in 2015, led to a significant contraction in economic activity and an economic recession. Real GDP growth decreased from 2.9% in 2013 to 0.3% in 2014, and there was negative GDP growth of 3.4% in 2015 and 5.6% in 2016. The fiscal deficit increased from 2.6% in 2013 to 10.7% in 2016, before beginning to decline as the Government’s corrective measures began to take hold. The main factor driving the increase in the deficit was the fall in revenue from the oil and mineral extraction sector (such as royalties, taxes, and dividends received from oil and mineral extraction operations) which decreased from 8.4% of GDP in 2013 to 1.7% of GDP in 2015. Such revenues represented approximately 29% all fiscal revenue during 2005-2012. As exports declined, the current account of the balance of payments began recording deficits in 2013 after a decade of surpluses, reaching a deficit of 16.5% of GDP at its peak in 2015. The impact of the economic crisis on the current account of the balance of payments was compounded by unabated large imports of goods and services for the construction of the expanded Staatsolie oil refinery and the new Merian gold mine during this period. Reflecting the decrease in net exports and interventions by the CBvS to support the SRD, gross international reserves declined significantly from US$1.0 billion at the end of 2012 to US$330 million at the end of 2015.

24 Similar to other commodity-exporting countries, Suriname’s local currency lost more than half of its value relative to the U.S. dollar as a result of the decline in commodity prices. The depreciation, in conjunction with increases in utility tariffs, led to a sharp increase in inflation rates. As the fiscal contraction and monetary policy measures took hold, the exchange rate stabilized beginning September 2016, with an immediate decline in 12-month inflation rates.

To soften the adjustment path and facilitate the implementation of the far-reaching structural reforms in the Government’s economic reform program, the Government approached international financial institutions in early 2016. These efforts led to a Stand-By Arrangement (the “SBA”) in May 2016 with the IMF, Suriname’s first such program since the country joined the IMF in April 1978. The SBA reflected the quantitative adjustment program and the calendar of economic reforms that the Government designed and began implementing in August 2015 and presented to the IMF in early 2016. As Suriname entered negotiations with the IMF, Suriname also began negotiations with the World Bank, the Inter-American Development Bank (IDB), and the Caribbean Development Bank (CDB) to secure program and project loans. Program loans are loans in support of reform efforts, while project loans made for specific infrastructure investment purposes. The IDB and CDB provided an aggregate of US$120 million in budget support loans to help finance the program in June 2016. In October 2016, the Republic issued US$550 million in principal amount of 9.25% Notes due 2026, which was its first ever international bond offering.

In view of the improvement in the current account of the balance of payments, which recorded a surplus in the fourth quarter of 2016, the Government decided to cancel the SBA in April 2017. IMF support is always intended to support the balance of payments of a country in crisis, and the strong reversal of the Surinamese current account balance during 2016 obviated the need for further IMF assistance.

The Government’s reform program has produced noticeable positive effects on the economy. In 2017, Suriname’s GDP returned to moderate growth. As the exchange rate stabilized in late 2016, inflation has decreased continuously. From the peak of 79% in October 2016, 12-month inflation decreased to 9.2% in December 2017, to 5.5% in December 2018 and to 4.2% in October 2019. The fiscal deficit declined from 10.6% of GDP in 2016 to 7.5% in 2018. The current account of the balance of payments has improved from a deficit of 16.5% of GDP in 2015 and 5.6% of GDP in 2018. International reserves increased from US$330 million at the end of 2015 to US$580 million at the end of 2018, covering more than three months of imports. As of September 30, 2019, international reserves were US$720 million, covering 3.9 months of imports.

25 Gross Domestic Product

Suriname’s nominal GDP was SRD 19.5 billion, SRD 24.0 billion and SRD 25.8 billion for 2016, 2017 and 2018. Between 2004 and 2014, real GDP increased by an average of approximately 4.5% per year, one of the highest economic growth rates in the Latin America and Caribbean region over this period. With the sharp decline in international commodity prices beginning in 2013, Suriname’s GDP growth slowed, and real GDP contracted in 2015 and 2016. In 2017, Suriname’s real GDP returned to positive growth.

While Suriname’s real GDP growth rates in 2013 (2.8%) and 2014 (1.8%) were close to the average growth rate of countries in the Latin American and Caribbean region during those years, they reflected a marked slowdown in Suriname’s economy as compared to previous years as a result of the fall in gold prices in the international markets, which led to a decline in disposable income in the mining sector in Suriname. A corresponding decline in the demand for goods and services and commercial and residential construction did not materialize until 2015. As fiscal mining revenue, such as direct taxes and dividends received from oil and gold sector companies, contracted, the Government also reduced expenditure, further contributing to the slowing of the economy.

Suriname entered into a recession in 2015 which lasted through 2016. Real GDP decreased by 3.4% in 2015, mainly due to a decline in the mining-related manufacturing sector, which was not offset by growth in other sectors. The decline in manufacturing reflects the reduction in oil production at the old Staatsolie oil refinery in the course of the construction of the expanded Staatsolie oil refinery (which was completed in December 2015) and a reduction in gold production by small and informal gold miners. The economy continued in a recession in 2016, as real GDP decreased by 5.6% from 2015 to 2016. Contributing to the contraction of the economy in 2016 was the contraction of the Government’s demand for goods and services and the full year impact on the economy of the closure of the alumina production facility.

The downward growth trajectory in Suriname’s GDP growth rates was reversed with GDP growth of 1.7% in 2017 and 2.6% in 2018, according to the WGFP. According to the CBvS monthly economic activity indicator (MEAI), which also tracks official GDP, GDP growth was 2.6% in 2017 and 3.0% in 2018. MEAI data is provided monthly by the CBvS with a lag of approximately four months. Since inception in 2012, it has tended to slightly overestimate official GDP. The GDP growth in 2018 is related to a strong rebound in private sector credit and investment activity, which also accounts for the increase in the current account deficit in 2018 as imports of investment goods increased sharply in 2018.

Based on MEAI data as of June 2019, GDP growth is forecasted to be 2.0% for 2019. The IMF has forecasted Suriname’s GDP growth at 2.2% in 2019 supported by a recovery in commodity prices, while the WGFP projects a lower GDP growth rate of 2.0%. The strong rebound in private sector credit and investment activity, including the increase in imports of investment goods has continued in 2019, leading to a larger current account deficit. The IMF forecasts Suriname’s GDP to grow at rates ranging from 2.1% to 3.0% from 2020 to 2023.

26 The following tables set out Suriname’s real GDP and real GDP growth by economic sector for the years presented in real terms at 2007 prices.

Real GDP(1) by Economic Sector (2007 Prices)

For the Year Ended December 31, 2014 2015 2016 2017 2018 (SRD millions at 2007 prices) Private Sector(2) ...... 8,018.7 7,846.8 7,218.0 7,642.8 7,852.5 Agriculture, Hunting and Forestry ...... 743.3 801.5 781.6 874.8 913.0 Fishery ...... 346.7 334.0 369.3 419.1 442.7 Mining and Quarrying(3) ...... 595.5 508.8 459.4 666.4 663.1 Manufacturing ...... 1,705.7 1,723.7 1,848.7 2,246.6 2,216.7 Electricity, Gas and Water Supply ...... 177.3 171.6 147.6 157.4 161.4 Construction ...... 557.9 650.6 541.5 555.3 585.3 Wholesale and Retail Trade ...... 1,843.4 1,649.8 968.7 787.9 885.5 Hotels and Restaurants ...... 305.3 267.7 295.6 308.9 318.2 Transport, Storage and Communication ...... 673.9 693.0 704.8 678.9 716.2 Financial Intermediation ...... 599.9 566.1 627.6 464.7 465.1 Real Estate, Renting and Business Activities ...... 337.6 348.3 352.1 360.6 365.9 Education ...... 6.9 6.7 5.0 5.1 5.0 Health and Social Work ...... 47.2 47.6 46.7 47.8 46.3 Other Community, Social and Personal Services...... 78.2 77.5 69.4 69.4 68.1 Public Sector ...... 1,140.7 1,037.8 880.1 895.7 910.0 Agriculture, Hunting and Forestry ...... 18.3 19.4 15.4 16.6 13.6 Electricity, Gas and Water Supply ...... 9.4 8.7 7.7 8.3 8.1 Construction ...... 6.8 6.1 6.7 6.3 6.6 Transport, Storage and Communication ...... 19.2 18.8 16.3 15.2 15.5 Public Administration ...... 450.8 393.9 401.0 393.4 422.1 Education ...... 334.6 294.0 217.3 235.4 230.3 Health and Social Work ...... 301.6 297.0 215.7 220.5 213.7 Real GDP at basic prices(4)...... 9,159.4 8,884.6 8,098.1 8,538.5 8,762.5 Taxes less subsidies on production ...... 1,042.4 968.9 1,207.6 931.2 955.6 Real GDP at market prices(5) ...... 10,201.8 9,853.5 9,305.7 9,469.7 9,718.1

(1) Base Year 2007, SNA 1993 compliant. (2) Non-Financial Corporations, Financial Corporations, Households, Non Profit Institutions Serving Households. (3) Mining includes oil and mineral extraction operations. (4) GDP at basic prices is used in the national accounts to refer to the prices of products as received by producers. (5) GDP at market prices is GDP calculated at prices as paid by consumers, which taxes paid and subsidies received by consumers. Unless otherwise indicated, GDP is usually denoted as GDP at market prices. Source: General Bureau of Statistics (2014-2018).

27 Real GDP(1) Growth by Economic Sector

For the Year Ended December 31, 2014 2015 2016 2017 2018 (percentage change) Private Sector(2) (2.2) (2.1) (8.0) 5.9 2.7 Agriculture, Hunting and Forestry 3.1 7.8 (2.5) 11.9 4.4 Fishery 4.6 (3.7) 10.6 13.5 5.6 Mining and Quarrying(3) (5.9) (14.6) (9.7) 45.0 (0.5) Manufacturing (8.2) 1.1 7.2 21.5 (1.3) Electricity, Gas and Water Supply (1.0) (3.2) (14.0) 6.7 2.6 Construction 19.7 16.6 (16.8) 2.5 5.4 Wholesale and Retail Trade (1.8) (10.5) (41.3) (18.7) 12.4 Hotels and Restaurants (0.3) (12.3) 10.4 4.5 3.0 Transport, Storage and Communication 4.4 2.8 1.7 (3.7) 5.5 Financial Intermediation (17.9) (5.6) 10.9 (26.0) 0.1 Real Estate, Renting and Business Activities 3.7 3.2 1.1 2.4 1.5 Education 1.9 (3.1) (26.1) 2.2 (2.2) Health and Social Work 1.4 0.9 (1.8) 2.2 (3.1) Other Community, Social and Personal Services 2.9 (0.8) (10.4) 0.0 (1.9) Public Sector 19.3 (9.0) (15.2) 1.8 1.6 Real GDP at basic prices(4) 0.0 (3.0) (8.9) 5.4 2.6 Real GDP at market prices(5) 0.3 (3.4) (5.6) 1.8 2.6

(1) Base Year 2007, SNA 1993 compliant. (2) Includes non-financial corporations, financial corporations, households and non-profit institutions serving households. (3) Mining includes oil and mineral extraction operations. (4) GDP at basic prices is used in the national accounts to refer to the prices of products as received by producers. (5) GDP at market prices is GDP calculated at prices as paid by consumers, which taxes paid and subsidies received by consumers. Unless otherwise indicated, GDP at market prices is used for GDP in Government statistics. Source: General Bureau of Statistics (2014-2018).

28 Principal Sectors of the Economy

The following table sets forth the principal sectors of the Surinamese economy as a percentage of GDP for the years presented.

GDP by Economic Sector

For the Year Ended December 31, 2014 2015 2016 2017 2018 (in percentage of GDP) Private Sector 78.6 79.6 77.6 80.7 80.8 Agriculture, Hunting and Forestry 7.3 8.1 8.4 9.2 9.4 Fishery 3.4 3.4 4.0 4.4 4.6 Mining and Quarrying(1) 5.8 5.2 4.9 7.0 6.8 Manufacturing 16.7 17.5 19.9 23.7 22.8 Electricity, Gas and Water Supply 1.7 1.7 1.6 1.7 1.7 Construction 5.5 6.6 5.8 5.9 6.0 Wholesale and Retail Trade 18.1 16.7 10.4 8.3 9.1 Hotels and Restaurants 3.0 2.7 3.2 3.3 3.3 Transport, Storage and Communication 6.6 7.0 7.6 7.2 7.4 Financial Intermediation 5.9 5.7 6.7 4.9 4.8 Real Estate, Renting and Business Activities 3.3 3.5 3.8 3.8 3.8 Education 0.1 0.1 0.1 0.1 0.1 Health and Social Work 0.5 0.5 0.5 0.5 0.5 Other Community, Social and Personal Services 0.8 0.8 0.7 0.7 0.7 Public Sector 11.2 10.5 9.5 9.5 9.4 Real GDP at basic prices 89.8 90.2 87.0 90.2 90.2 Indirect taxes minus subsidies 10.2 9.8 13.0 9.8 9.8 Real GDP (at 2007 prices) 100.0 100.0 100.0 100.0 100.0

(1) Mining includes oil and mineral extraction operations. Source: General Bureau of Statistics (2014-2018).

Mining and Quarrying and Manufacturing

The mining and quarrying and manufacturing sectors are related in that manufacturing includes the refining of extracted ore and crude oil. Mining comprises oil and mineral ore extraction operations. Manufacturing includes oil refining, mineral ore milling, and gold and, through 2015, alumina processing. In 2017, the mining and quarrying and manufacturing sectors combined contributed an estimated SRD 4.8 billion to GDP and accounted for an average of approximately 25.6% of Suriname’s total GDP, increasing from 22.3% in 2014 as the economy recovered. In 2018, the mining and quarrying and manufacturing sectors combined contributed an estimated SRD 5.6 billion to GDP and accounted for 29.6% of Suriname’s GDP in 2018.

The mining and quarrying sector contracted by 32.7% between 2013 and 2016, before growing by 13.6% in 2017 with the opening of the Merian gold mine. The contraction of the mining and quarrying to GDP from 2013 to 2016 mainly reflects the decline of bauxite mining in the country which ended with the closure of the last bauxite mines in December 2015. The manufacturing sector grew by 7.2% in 2016 as the expanded Staatsolie oil refinery

29 came online, but grew by only by 3.0% in 2017. The combined mining plus manufacturing sector declined by 1.1% in 2018 after growing by 26.2% in 2017.

Oil revenue typically contributes more to the public finances than non-oil mining proceeds due to dividend payments, in addition to taxes, from state-owned oil company Staatsolie to the Government.

Mineral ore extraction is regulated by the Ministry of Natural Resources, while oil extraction is regulated by Staatsolie. A revised version of the Mining Decree is currently in the process of being drafted for the purpose, among other things, improving the transparency of the approval process in connection with the issuance of mining concessions. Suriname is taking steps to improve transparency in its mining sector. As part of this effort, Suriname became a member in the Extractive Industries Transparency Initiative (the “EITI”) in May 2017.

Gold

The following are the principal sources of production of gold in Suriname:

 Merian gold mine. Approximately 40% of production and exports is currently carried out at the Merian gold mine, which began production on October 1, 2016. The mine is owned by Newmont Goldcorp Suriname, a joint venture company that is 75%-owned by Newmont Goldcorp Corporation and 25%-owned by Staatsolie. See “Public Sector Finances – Large-Scale Oil and Gold Projects.”

 Rosebel gold mine. Approximately one-fourth of production and exports is currently carried out at the Rosebel gold mine in the Brokopondo district of Suriname. The mine is owned by Rosebel Gold Mines N.V. (“Rosebel Gold Mines”), a joint venture company that is 95%-owned by Canadian company IAMGOLD Corporation, and 5%-owned by the Government. See “Public Sector Finances – Large-Scale Oil and Gold Projects.”

 Informal and small-scale gold mining. Approximately one-third of Suriname’s gold production and exports currently come from the informal and small-scale gold mining sectors. The Government estimates that approximately 20,000 individuals, including undocumented immigrants from Brazil, engage in small scale and mostly unlicensed, unregulated gold mining operations throughout the mineral-rich areas of Suriname, including in areas where the Government has granted mining concessions to other parties. While information about gold extraction in the informal sector is unreliable, the Government ultimately controls the export of gold from this sector, as gold is purchased by CBvS-authorized gold dealers. After carrying out a national consultation process with all the stakeholders involved in the informal gold sector, the Government established a Commission to Regulate the Gold Sector in 2011, which registers informal miners, regulates concessions, provides health and security services, and educates informal miners in sound ecological and safe mining practices.

In addition to the foregoing, the Saramacca gold mine is a satellite operation to the Rosebel gold mine, which is currently being developed. The Bronkolonko gold mine, also a satellite operation to the Rosebel gold mine, was approved in early 2018. The Republic intends to hold, through an unincorporated joint venture, a 30% equity participation in the Saramacca and Bronkolonko concessions, with IAMGOLD Corporation holding 70%. Gold production at Saramacca began in October 2019. Gold has not yet been produced from the Bronkolonko concession.

Most of Suriname’s gold is exported from the Merian gold mine and the Rosebel gold mine. Some of Suriname’s semi-refined gold from small miners is sold for further refining to Kaloti Jewelry Group (“Kaloti”), a United Arab Emirates (“UAE”) company, before being exported to the UAE for final refining and distribution. In 2013, Kaloti built a weighing station in Suriname to increase the refined grade of the gold. The Government has a 5% equity participation in this project.

From 2005 to 2012, annual gold exports from Suriname increased by 491%, driven by the sharp increase in the price of gold in the international markets and the increased capacity and output of the Rosebel gold mine. The decline of gold prices in 2013 led to a sharp decline in gold production by informal and small-scale producers. While the Rosebel gold mine maintained its gold production levels in 2012, its profitability was reduced by the increasing

30 costs of extraction as it began mining in deeper pits and extracting gold from hard rock. Total gold production in Suriname declined from a peak of approximately 1.1 million ounces in 2012 to an estimated 0.85 million ounces in 2015, while the export value decreased by 47% between 2013 and 2016. Gold production significantly increased in 2017 to 1.3 million ounces as a result of the starting of gold production at the Merian gold mine in October 2016.

Production volumes were relatively constant in 2017 and 2018, as no new gold mines were opened during those two years, while existing mines continued to operate with similar ore and gold content. However, both Newmont Goldcorp Corporation and IAMGOLD Corporation are making significant investments in the preparation of three new mines (Saramacca in the case of IAMGOLD Corporation and Sabajo and Maraba in the case of Newmont Goldcorp Corporation), which are expected to become operational in during the period from 2019 to 2024. In addition, IAMGOLD Corporation is currently conducting exploration in its new Bronkolonko concession, while Newmont Goldcorp Corporation is conducting exploration in the Amazonia South and Amazonia North concessions. Fiscal revenue from income tax is expected to increase substantially in 2020, as the Newmont Goldcorp Suriname investments in the Merian gold mine undertaken four years ago are now fully depreciated and will begin making a significant contribution to income tax revenue in 2020. Most investments in the Merian gold mine were completed by the fourth quarter of 2016 and thus the investments were fully depreciated by the fourth quarter of 2019.

The following table sets forth information on Suriname’s gold industry for the years presented.

Indicators of the Gold Industry

For the Year Ended December 31, Units 2014 2015 2016 2017 2018

Gold production x 1000 troy ounces 992 852 881 1,328 1,338 Gold export volume x 1000 troy ounces 968 821 840 1,288 1,320 Gold export price US$/troy ounce 1,209 1,114 1,191 1,222 1,231 Gold export value US$ millions 1,170 917 996 1,579 1,625 Government revenue (1) US$ millions 35 19 23 47 91 Number of employees(2) 1,907 2,264 2,366 2,434 2,470 (percentage changes) Gold production x 1000 troy ounces (10.0) (14.2) 3.4 51.2 0.5 Gold export volume x 1000 troy ounces (8.1) (15.2) 2.3 53.8 2.2 Gold export price US$/troy ounce (10.2) (7.9) 6.9 2.2 1.2 Gold export value US$ millions (17.4) (21.6) 8.6 58.5 2.9 Government revenue (1) US$ millions (60.3) (45.8) 21.0 104.3 93.4 Number of employees (2) 20.9 18.7 4.5 2.9 1.5

(1) Only includes foreign currency revenue from Rosebel Gold Mines and Newmont Goldcorp Suriname (comprising income tax revenue, indirect tax revenue and royalties). Does not include revenue from informal or small-scale gold producers. (2) Only includes employees of Rosebel Gold Mines and Newmont Goldcorp Suriname. Sources: IAMGOLD Corporation, Newmont Goldcorp Suriname, CBvS, SSFS.

Oil

Suriname is currently the only oil producer in the Guyana Basin and is the third largest oil producer in the Caribbean region, after Trinidad and Tobago and Cuba. Suriname’s oil industry is dominated by Staatsolie, a vertically-integrated oil company that is wholly owned by the Republic. Staatsolie is the only local producer of refined products and is an important contributor to the Surinamese economy. Although Staatsolie is wholly-owned by the Government, it is a limited liability company and is managed independently as a commercial entity.

Staatsolie was founded in December 1980. Staatsolie’s core activities are exploration, crude oil production (average approximately 16,500 barrels per day (“bpd”) in 2018 (all onshore), refining (nameplate capacity 15,000 bpd), retail fuel distribution (current average 2,500 bpd) and thermal power generation (generation capacity 96 MW). It holds the exclusive concession rights for exploration and production to all onshore and offshore hydrocarbon

31 reserves in Suriname. In 2018, Staatsolie generated US$506 million in gross revenue and US$149 million in profit before tax.

Staatsolie is the only petroleum exploration, production, and refining company in the country and also has an institutional role whereby it acts as an agent on behalf of the Government on energy policy, promotion, contracting and supervision of oil-related activities carried out by private sector companies. According to Suriname’s Mining Decree of 1986, as amended (the “Mining Decree”), only state enterprises can obtain mining rights for hydrocarbons. The Government and Staatsolie are in the process of discussing the possible separation of Staatsolie’s commercial and institutional roles as they relate to the exploration and development of hydrocarbons in Suriname.

Staatsolie’s oil production takes place at three onshore fields in the Saramacca district of Suriname: Tambaredjo, Calcutta, and Tambaredjo North-West. All of the crude oil produced by Staatsolie is Saramacca crude oil, which is very sweet with a low sulphur content. During the year ended December 31, 2018, Staatsolie produced 6.0 MMBbls of oil at its three fields, as compared to 5.95 MMBbls during the year ended December 31, 2017. In 2018, Staatsolie’s average daily production output at Staatsolie’s three fields was 16,521 bpd.

Staatsolie carries out near-shore exploration, while offshore exploration is carried out on the basis of profit- sharing agreements (PSAs) with a number of international oil companies (IOCs), including Kosmos Energy, Tullow Oil, Petronas and Apache. Exploration, evaluation and production development activities are still in progress at these fields to discover new reservoirs and to increase production. Offshore Suriname is part of the Guyana Basin and, according the U.S. Geological Survey, is the second largest underexplored basin in the world. Suriname’s offshore oil areas have high geological prospectivity and have recently attracted significant exploration interest from large international exploration and production companies with which production sharing agreements (PSAs) have been signed. As of the date of this Offering Memorandum, these offshore exploration efforts have not resulted in commercial oil finds. However, major oil discoveries have occurred in the offshore area of neighboring Guyana.

Staatsolie is the only refining company in Suriname. Staatsolie’s principal downstream asset is its oil refinery located at Tout Lui Faut in Suriname. In its refinery, Staatsolie processes crude oil to fuel oil, diesel, gasoline, bitumen and sulfuric acid. In 2010, Staatsolie launched its refinery expansion project, whereby capacity was increased from 7,200 to 15,000 barrels per day and excess production oil is exported in the form of fuel oil. Construction on the expanded refinery began in 2012 and was completed in December 2015. The expanded refinery replaced Staatsolie’s previous refinery, the core components of which have been now been decommissioned. Total throughput of the refinery amounted to 2.7 MMbbls in 2018.

Staatsolie’s GOw2 subsidiary, the former retail operation of Chevron Corporation in Suriname, was acquired by Staatsolie in 2011. GOw2 operates service stations, four bulk stations, and an aviation supply business. GOw2 had gross revenue of US$126 million in 2018. Staatsolie also engages in bunkering activities through its bunkering subsidiary Ventrin Petroleum Company, a Trinidad and Tobago company.

For more information about Staatsolie see “Public Sector Finances – State-Owned Companies – Staatsolie.”

32 The following table sets forth key indicators for the Surinamese oil sector (which is entirely the business of Staatsolie) for the years presented.

Indicators of the Oil Sector

For the Year Ended December 31, Units 2014 2015 2016 2017 2018 Crude production x 1000 barrels (“bbls”) 6,130 6,189 5,980 5,953 5,980 Refinery production x 1000 bbls 1,459 2,899 3,787 4,828 4,747 Exports of oil products x 1000 bbls 3,459 3,024 3,433 2,952 2,805 Export price US$/bbl 84 41 33 56 69 Export value US$ millions 317 147 150 156 201 Government revenue(1) US$ millions 262 17 9 55 74 Investment US$ millions 354 252 81 99 174 Employees (at period end) Number 1,052 1,044 1,022 1,050 1,113 (1) Comprises taxes, duties, and gross dividends. The significant decrease in Government tax and dividend revenue from 2014 to 2015 and 2016 is largely attributable to the fall in the international oil price Sources: Staatsolie, CBvS, Suriname Customs Department, IMF, www.platts.com.

Bauxite and Alumina

The mining and manufacturing sector was dominated by bauxite mining and its related alumina refinery or aluminum smelter activities until the emergence of the gold and oil mining industries in the 2000s and the decline in the industry from 2006 to 2016. Bauxite mining was carried out by subsidiaries of Alcoa (through 2015) and BHP Billiton Limited (through 2009). An alumina refinery was operated by Suralco through 2015.

With the international decline in alumina prices and continued oversupply in world markets, alumina production and exports decreased substantially beginning in 2008. Alumina exports decreased from US$673 million in 2007, representing 49% of all exports, to US$232.7 million in 2015, representing 14% of total exports. In December 2015 bauxite and alumina production ceased with the closure of the last bauxite mines and the last part of the Suralco alumina refinery. Alumina exports from Suriname ceased in early 2016. While the last part of the Suralco refinery was closed in late 2015, Suralco is currently engaged in the dismantling and environmental clean-up of the refinery, the long-term maintenance of the bauxite red slurry lakes and the environmental rehabilitation of the former bauxite mines.

In 2015, Alcoa began to study certain potential new projects, the most significant of which is a potential bauxite mining project in the Bakhuys mountains of Suriname. This project would require new roads and power generation facilities, opening the central and western part of the country for development, and a potential original investment of approximately US$2.5 billion, equivalent to about 70% of Suriname’s 2018 GDP. Staatsolie, as the future indirect owner of Suriname’s electricity generation capacity, is currently discussing this project with Alcoa. There is no certainty that such an investment or project will materialize in the future.

Other Industry and Manufacturing

Other industry and manufacturing in Suriname is geared towards production for local consumption and has grown at approximately the same pace as real GDP. Exports of non-mining and non-oil manufactured goods have not contributed substantially to GDP. The subsector includes private sector companies in the food and beverage, consumer, paper and plastic industries.

Wholesale and Retail Trade

The wholesale and retail trade sector accounted for an average of approximately 13.4% of GDP from 2014 through 2017, with this percentage declining sharply in 2016 and 2017 as a result of the economic crisis. Wholesale and retail trade consists of products sold in the local market as well as to visitors from neighboring countries, given high price levels in French Guyana and the limited supply of certain products in lower-income Guyana. Although shipping companies consider the Paramaribo port the most efficient and lowest-cost port in the Guyanas region,

33 international transshipment-based trade activity is not a significant contributor to GDP, mainly due to the limited demand in neighboring countries and limited land transport connections. The relatively large and affluent middle class in Paramaribo and retail tourism from neighboring countries have resulted in a continued increase in the number of higher-end retail outlets. In real terms, growth in the wholesale and retail trade sector is mirrored by the import activity in the country and GDP statistics generally use non-mining imports as a proxy for this sector. Reflecting the changes in the disposable income and investment activity in the mining and related manufacturing sectors, wholesale and retail trade grew rapidly until 2014. As domestic demand and imports contracted severely during the economic crisis, the wholesale and retail trade sector contracted from 2015 through 2017.

With the recovery of the economy that began in late 2016, the sector began to grow relatively faster than the economy as a whole. The sector grew in real terms by 12.4% in 2018, partly due to a surge in imports in the machinery and transport equipment areas, which, although mainly related to mining and ancillary services, also benefitted the trading sector.

Transport, Storage and Communication

The transport, storage and communications sector had production of approximately SRD 2.9 billion in 2018, and accounted for an average of approximately 7.2% of GDP from 2014 to 2018.

The telecommunications sector grew rapidly after the state monopoly was lifted in 2007, and investment in the telecommunications sector has accelerated since 2013. The lack of sufficient Internet bandwidth and fiber optic cabling had historically been major issues restricting the expansion of the telecommunications sector. Driven by private sector competition from two foreign companies (Digicel and Uniqua), telecommunication usage rates have decreased significantly since 2013 while access has increased rapidly. The telecommunications sector grew at an average rate of 2.3% annually during the period of the economic crisis in 2015-2016. Since 2017, as Suriname’s economy has recovered, the sector has grown at a faster rate than the economy as a whole, with growth of 5.5% in 2018. The relatively faster growth can be attributed to the increased trading and import volumes in 2018.

Suriname has two international airports. The larger of the two, Johan Adolf Pengel International Airport, also known as Paramaribo-Zanderij International Airport (PBM), is located in the town of Zanderij (45 kilometers south of Paramaribo) and is the hub for the national airline carrier Surinam Airways. The smaller of the two is Zorg en Hoop, which hosts a number of locally owned and operated airlines and has scheduled and charter flights to the interior of Suriname and to Guyana.

The Government is investing in road and other infrastructure for the expansion of the Port of Paramaribo, the largest port in northeastern South America, to become a regional terminal handling cargo to and from Suriname, French Guiana, Guyana and northern Brazil. The Port of Paramaribo is owned and operated by DP World Limited. In September 2019, the Government signed a loan agreement with the World Bank to finance the dredging of the Saramacca channel, an important waterway for transport and the regulation of water levels around Paramaribo. Ongoing dredging of the Suriname River will also improve the accessibility of the Port of Paramaribo and the new industrial zone at the old alumina refinery site. With financial and technical assistance from the EU, France and China, certain port facilities have been upgraded and road corridors along the northern coast and toward Paramaribo-Zanderij International Airport are being widened to accommodate heavy trucks and to accelerate transportation activity. See “ – Construction” below.

Construction

The construction sector had production of approximately SRD 2.0 billion in 2018 and accounted for an average of approximately 6.0% of GDP annually from 2014 through 2018, as compared to an average of 4.7% of GDP from 2006 to 2013. The sector grew by 5.4% in 2018.

The bulk of the construction industry is private sector-led, comprising mostly commercial and residential construction. The sector has benefitted from large-scale construction projects, particularly in the oil extraction and processing and gold mining sectors.

34 Infrastructure projects are financed by the national budget and may include specific financing from regional development banks, bilateral lenders or export credit agency-supported private construction companies. Development bank funded projects include IDB-funded road and bridge projects. Bilateral lenders such as China are funding and overseeing road construction projects. The most visible project in this sector is a new road being built between Paramaribo and Paramaribo-Zanderij International Airport. In addition, Chinese companies are funding and overseeing the construction of various hospitals and clinics, which form part of the Government’s obligations under the 2016-2017 health sector reform, which included changes to the financing system of hospitals and retroactive payments for pension contributions and the construction and modernization of hospitals and clinics throughout Suriname. Bridges and levees are being built by private international construction companies with financing from export credit agencies.

Agriculture, Animal Husbandry and Forestry

Production in the agriculture, animal husbandry, and forestry sector was approximately SRD 1.9 billion in 2018 and its share in the economy increased from an average of 7.3% of GDP from 2016 to 2013 to an average of 8.5% of GDP from 2014 to 2018. The sector grew by approximately 11% in 2017 and 4.4% in 2018.

Suriname’s agricultural, animal husbandry and forestry sector includes primarily production of bananas, rice and timber for export. Bananas were produced by a state-owned company Stichting Behoud Bananen Sector (“SBBS”), which was privatized in 2014. After privatization, the sector is now comprised exclusively of Food and Agricultural Industries N.V. (“FAI”), a privately-owned company. Suriname has traditionally been an exporter of bananas and rice to the EU as a member of the African, Caribbean and Pacific Group of States (the ACP Group), but lost preferential access due to WTO pressure on the EU and as result has faced strong competitive pressure, mainly from larger Latin American producers. After the privatization of SBBS in 2014, the banana industry increased production in 2014, but suffered a sharp reversal in 2015 due to a wide-spread Moko fungal infestation. FAI replanted its affected acreage and exported approximately US$20 million of products in each of 2016 and 2017, with its exports declining to approximately US$18 million in 2018.

The rice sector continues to enjoy access to foreign markets on account of its quality as a specialty niche product with the world’s longest long-corn rice. Production has remained relatively consistent since 2011 and the sector had exports of an average of approximately US$35 million during 2016-18. Rice is produced by medium and large-scale commercial farms in the west of the country and is exported to the Caribbean and European markets and sold locally in Suriname.

Suriname had export revenue of fruits and vegetables to the EU of US$21 million in 2017 and US$24 million in 2018. Beginning on December 14, 2019, exports of all vegetables and fruits to the EU will be required to be certified with products described in full detail under tightened EU phytosanitary import requirements which became effective on September 1, 2019. A failure to meet the new EU requirements could have an adverse effect on Suriname’s exports of fruits and vegetables to the EU.

Logging is carried out mostly by international companies and is subject to strict sustainability guidelines. It targets high-value specialty woods, while lower quality construction wood plays a minor role. Exports of timber have increased substantially in recent years after foreign direct investment (“FDI”) by Chinese companies. With new investment and a demand for specialty timber products from China, logging exports increased from US$40 million in 2016 to US$70 million in 2018 and has accounted for the relatively strong growth of the agriculture, fisheries, and forestry sector in recent years.

The agriculture sector is of particular importance to the Government’s plans to implement initiatives to promote the economy’s diversification and to attract FDI.

35 The following table sets forth information on Suriname’s agricultural, animal husbandry and forestry products sector for the years presented. Data is not available for periods later than 2017.

Agricultural, Animal Husbandry and Forestry Products

For the Year Ended December 31, 2014 2015 2016 2017 Agricultural production (tons) 457,296 440,417 438,639 457,054 Agricultural production value (SRD thousands) 843,859 824,347 1,123,000 1,552,938 Stockbreeding slaughter weight (tons) 12,824 13,199 12,361 13,996 Stockbreeding production value (SRD thousands) 211,110 204,138 267,044 345,406 Fisheries exports (tons) 28,991 29,270 24,433 29,381 Export value fish products (SRD thousands) 80,157 78,722 111,501 190,079 Timber production (m3) 494,047 568,657 583,518 863,482 Sawn timber (m3) 133,000 145,000 123,000 150,000 Wood export (m3) 169,099 226,333 293,148 499,888 Wood export (USD thousands) 27,977 32,117 40,529 63,621 ______Source: Ministry of Agriculture, Animal Husbandry & Fisheries; and Foundation for Forest Management and Production Control.

Hotels and Restaurants

The hotels and restaurants sector contributed approximately SRD 990 million to GDP in 2018 and accounted for an average of approximately 3.1% of GDP from 2014 to 2017, as compared to an average of 2.7% of GDP during 2006 to 2013. The decline in economic activity and disposable income in Suriname led to a contraction in the hotels and restaurants sector by 12.3% in 2015, but the sector subsequently rebounded, growing by 10.4% in 2016, 4.5% in 2017 and 3.0% in 2018.

The hotels and restaurants sector caters to local demand for restaurant services and international business travelers, while the tourism subsector remains relatively small, catering to a significant extent to visitors of Surinamese descent from Europe. Growth in the hotels and restaurants sector has followed the trends in disposable income and the small tourism industry. The Government believes that tourism represents a potential area of growth for the Surinamese economy and aims to develop the tourism sector, particularly targeting the areas of eco-tourism, medical tourism, and the development of resorts. Hotel accommodation has increased significantly since 2007, with the additions of larger upper-level domestically-owned hotel and international hotels such as Best Western, Marriot, and Wyndham. As an effort to promote tourism to foreigners of Surinamese descent, Suriname recently granted them a special immigration entry status. The introduction of this status could have the additional benefit of accelerating the net migration that Suriname has registered in recent years from Europe. In addition, visa requirements and procedures have been significantly eased for all foreign visitors since 2012 to facilitate tourism.

The hotels and restaurants sector has also benefited in recent years from the significant increase in real disposable income in Suriname and in Paramaribo, in particular, which has boosted the demand for local tourism, as well as hotel and restaurant services among the growing urban middle class.

The following table sets forth the number of visitors to Suriname in each of the years presented. Data is not available for periods after 2017.

Visitors to Suriname

For the Year Ended December 31, 2014 2015 2016 2017 251,611 227,699 256,951 278,035 ______Source: General Bureau of Statistics, Suriname Tourism Foundation.

36 Electricity, Gas and Water Supply

The electricity, gas and water supply sector accounted for an average of approximately 1.7% of GDP from 2014 to 2018.

From 2014 to 2016, the sector contracted by an average of 6.1% annually, while the sector grew by 6.7% in 2017. In 2016, the sector contracted by 14%, which was attributable to the decline in electricity consumption that followed tariff increases in October 2015 and June 2016. Growth in the sector was 6.7% in 2017 and 2.6% in 2018. The implementation of the planned reform of the electricity sector is expected to result in a significant decrease in electricity production costs and increases in consumer tariffs. This will reduce the sector’s share in real GDP but may increase its share in nominal GDP.

Suriname has approximately 445 MW of installed electricity generation capacity, 96% of which is concentrated in the wider Paramaribo network area. The generating capacity in the Paramaribo network consists of the following sources:

 Hydroelectricity power provided by the Afobaka HPP (189 MW capacity);  the EBS-owned Saramaccastraat Thermal Plant, comprising the adjacent DPP1 and DPP2 thermal power stations with a combined capacity of 167.5 MW; and  SPCS’s thermal power generation plant (89 MW capacity).

The remainder of the electricity generation in Suriname is dedicated to towns in the eastern and western parts of Suriname and the interior and consist of 26 non-connected diesel generators.

N.V. Energiebedrijven Suriname (EBS) is the national electricity company of Suriname. It owns and operates diesel and heavy fuel oil generators. EBS operates under a concession from the Government and has a monopoly on the transmission and distribution of electricity in Suriname. The electricity sector is regulated by the Ministry of Natural Resources.

EBS has historically been severely undercapitalized, and tariffs have covered only a small percentage of its generation costs. In recent years, inexpensive maintenance and upkeep has led to older assets not being in their original specification or intended fit. These modifications are having an adverse impact on performance and longevity of the assets. EBS also reports a significant difference between the achieved operational and rated capacities of its assets.

The Government of Suriname is currently restructuring and reforming the country’s electricity sector. Following the passage of the Act on Energy Authority in March 2016, in 2017 the Energy Authority was created and ordered EBS to be divided into separate generating and distribution companies. The Government has decided to separate electricity production from its distribution and sales functions and to consolidate the production assets under Staatsolie’s power generation subsidiary SPCS. For more detailed information on the electricity sector and electricity sector reform, see “Annex A: Electricity Sector Reform.” See also “Use of Proceeds.”

Gas distribution to households or commerce in Suriname is exclusively carried out by EBS, which imports gas mostly from Trinidad and Tobago. Residential or commercial use of gas is limited, in particular due to the existence of electricity subsidies over many years. Industrial use of gas is also limited, although Staatsolie uses gas from EBS for its oil refinery.

Suriname has an unusually large supply of fresh water, ranked second in the world in per capita terms, according to the World Bank. Fresh water in urban centers is considered safe to drink. All water bottling companies in Suriname operate their own water treatment systems. Suriname has been working closely with the United Nations Environment Program and the IDB on water infrastructure rehabilitation projects. Under a pilot project, fresh water has been shipped to other countries in the Caribbean region, but it is unclear whether such exports will be material in the longer term.

37 Growth in water consumption in Suriname generally tracks the growth in the economy. The following table sets forth indicators of the water sector for the years presented. Data is not available for periods after 2017.

Water Sector Consumption(1)

For the Year Ended December 31, 2014 2015 2016 2017 (thousands of m3) Residential consumption 20,060 21,060 20,104 20,371 Commercial and industrial consumption 4,469 4,738 4,925 4,521 Public connection 1,406 1,443 1,487 1,361 Total consumption 25,935 27,240 26,516 26,253

______(1) Paramaribo, Wanica, Para, Nickerie, and Marowijne only. Source: General Bureau of Statistics publication: Environmental statistics.

Inflation

Inflation in Suriname is driven by changes in exchange rates, tariffs or taxes. Monetary aggregate expansion in Suriname has usually occurred after episodes of exchange rate changes and inflation increases, as opposed to preceding inflation. During periods of exchange rate stability and in the absence of policy-related inflation shocks, inflation in Suriname generally reflects trading partner price changes. Consistent with these dynamics, the inflation rate remained low and stable until October 2015, despite a significant decline in domestic demand. Suriname recorded an inflation rate of 3.9% in 2014, which represented an increase from 0.6% in 2013 but was still relatively low compared to peer countries.

In November 2015, monthly inflation increased sharply to 15.6% due to the increase in electricity tariffs as part of the Government’s phased elimination of electricity subsidies. Almost all of this inflation increase reflects a one-time 110% increase in “housing and utilities” prices associated with the increase in electricity tariffs in October 2015. This spike in inflation accounted for a large percentage of the 25.1% inflation rate for 2015. In December 2015, the CBvS devalued the SRD as part of its plan to float the currency, which ultimately occurred in March 2016. The initial devaluation and the depreciation following the float resulted in a significant spike in the inflation rate in 2016, with the 12-month rate reaching a high of 79.2% in October 2016. As the CBvS put in place strong monetary policy measures to reign in demand and the Government cut expenditure drastically, domestic demand contracted and the exchange rate quickly stabilized at approximately SRD 7.50 per U.S. dollar. With a stable exchange rate and compressed demand, inflation quickly abated. Continued exchange rate stability and a tight macroeconomic policy stance have been the main drivers for the continued deceleration of inflation. The inflation rate decelerated to 9.3% in 2017 and 5.5% in 2018. The 12-month inflation rate was 4.2% as of October 2019.

The following table sets forth the annual percentage change in the consumer price index (“CPI”) in the Republic for the periods indicated.

Inflation Rate (CPI)

As of As of December October 2013 2014 2015 2016 2017 2018 2019 (percentage) CPI change over previous 12 months ...... 0.6 3.9 25.1 52.3 9.3 5.5 4.2 ______Source: General Bureau of Statistics.

38 Employment and Wages

Suriname has an hourly minimum wage law, the Law on Minimum Hourly Wage of 2014, which came into force on January 1, 2015. Suriname also has child labor laws.

Suriname has had generally good labor relations in recent years, with significant union presence in all economic sectors and only limited strike activity or labor disputes. Workers have a legal right to unionize and unions are generally organized at the company level, as opposed to by economic sectors. The current governing coalition is generally sympathetic to organized labor and enjoys good relations with both private and public sector unions. The following table set out information on employment and labor in the Paramaribo and Wanica districts of Suriname as of the dates presented. Information as of a date later than December 31, 2017 is not currently available.

Employment and Labor (Paramaribo and Wanica only)(1)

As of December 31, 2014 2015 2016 2017 Economically active population (in thousands) 153.4 147.1 148.0 149.1 Total employment (in thousands) 145.0 136.4 133.7 137.8 Unemployment (in thousands)(2) 8.4 10.6 14.4 11.3 Unemployment rate (%) 5.5 7.2 9.7 7.6 ______(1) The Paramaribo and Wanica districts collectively represented approximately two-thirds of the total population of Suriname based on the 2012 census. (2) Unemployment refers to population at or above the minimum working age who are not employed and who are actively seeking work. Source: General Bureau of Statistics.

The Ministry of Labor provides job training programs for the unemployed, particularly in construction and welding. These programs target job openings at construction projects at companies such as Staatsolie, as well as projects in the growing residential housing construction sector. The Ministry of Labor also operates a job bank for the unemployed. The Office for the Reorganization of the Gold Sector provides training, social services, and information on job openings for miners in the informal gold sector.

Social Security, Healthcare and Education

Suriname has social security and publicly-funded healthcare and education systems. The Government provides a pay-as-you-go pension fund for its employees; however, the private sector is not subject to a mandatory pension regime. The retirement age for government employees is 60, at which point employees receive benefits from the public employees’ pension system and the universal social security system. Receipt of social security benefits by a person is not dependent upon the amount of contributions made by such person into the social security system.

All employers in Suriname are required to maintain private workplace disability insurance. Workplace disability compensation is therefore not funded by the Government.

Health care is free for persons up to age 17 and over age 60. Certain categories of persons aged between 18 and 59 also receive free health care. The Government has introduced a universal health insurance scheme in a phased approach. Under the scheme, existing health care programs have been combined, and systemic savings were generated during 2015-2016. However, a significant fiscal effort has been required to supplement health care facilities and repay overdue liabilities to the health care pension system that were created by the reform. The Government plans to expand the existing coverage of the health care systems to parts of the population that are not currently covered. The Government recognizes the potential financial implications of such an expansion and is carefully considering options to minimize the immediate and the medium-term fiscal impact, including further consolidation of health care plans or facilities, increased privatization and further reforms to health tariff schedules.

Education in Suriname is guaranteed by the state, although certain religious and secular institutions also provide schools. Primary schooling last six years and takes place at over 400 schools in Suriname, with the best schools being private secular schools located in Paramaribo. Secondary education begins at middle school where an academic

39 program including accounting, biology, mathematics and physics extends over four years. Some students remain at secondary schools for a further three-year academic program, while other students are diverted to vocational career- specific programs at the end of primary or middle school. The country’s higher education system includes five teacher training colleges, five higher professional institutes, and a number of research bodies. The Anton de Kom University was founded in 1968 and is the only university in Suriname. It has faculties of medical sciences, technological sciences, and social sciences that include economics, education, law, public administration, sociology and business management. There are also five research institutes with a wide range of fields.

Following the Surinamese tradition to maintain a wide social protection network and support the more vulnerable segments of society, the Government’s economic program provides for improving the current social cash transfer programs. This includes launching a conditional cash transfer program and setting minimum levels of social spending during the implementation of the economic reform program between 2015 and 2017. As part of its economic program, the Government has also implemented the Law on National Basic Care of 2014, the Law on Minimum Hourly Wage of 2014 and the Law on Minimum Wage of 2019.

Environmental Matters

Suriname has no mandatory environmental laws and relies on contracts with companies to set environmental standards or relies on companies to follow their own guidelines. Foreign public companies operating in Suriname, including IAMGOLD Corporation and Newmont Goldcorp Corporation, have contractual obligations to follow the environmental standards of the United States, while Staatsolie has its own environmental guidelines. The informal mining sector, however, has caused substantial environmental damage, in particular through its use of mercury and high-pressure water systems. The Government’s National Institute for the Environment is currently developing environmental legislation focused on mercury pollution, mainly targeting the informal mining sector, while the Commission for the Regulation of the Gold Sector is actively promoting the use of mining techniques that aim to cause less environmental damage. The Government has also built a new solid waste treatment plant as well as a plant, located in the district of Nickerie, which generates electricity from waste.

Privatization

The Government has holdings in companies that engage in a range of commercial activities. In 2014, the Government completed the privatization process of former state-owned banana company, SBBS. The Government has announced a willingness to privatize other public sector companies and financial institutions and is working with the World Bank and the IDB to establish a framework for identifying assets for sale and then proceeding with the divestment of public sector companies in an efficient and socially responsible manner.

40 BALANCE OF PAYMENTS

General

Balance of payments data reflects the value of the transactions carried out between a country’s residents and the rest of the world. The balance of payments is composed of two account groups:

 the current account, which is comprised of exports and imports goods and services, and credits and debits of income payments and current transfers; and

 the capital and financial accounts, which comprise the capital and financial inflows and capital and financial outflows.

As a commodity exporter, Suriname’s balance of payments and foreign trade are significantly affected by international commodity prices. Suriname’s most significant exported goods are extractive resources, such as gold and petroleum products. Prices and volumes of Suriname’s main exports increased significantly through 2012, mainly as a result of a strong increase in gold exports, which more than offset a decline in exports of alumina. From 2012 to 2014, the diverging international prices of gold, oil and alumina acted as an effective hedge against external economic factors and reduced the volatility of export and fiscal receipts that had affected the country during the previous decades.

Following the sharp decrease in commodity export prices beginning in 2013, Suriname’s external position deteriorated significantly with a large current account deficit and declining reserves. Suriname’s current account worsened from a surplus of 5.7% of GDP in 2011 to a deficit of 15.6% of GDP in 2015. The deterioration of the current account was primarily caused by the increase in imports related to the Staatsolie refinery expansion project in 2013-2015, the construction of the Merian gold mine in 2014-2016 and, to a lesser extent, the decline in mining revenue related to the decline in gold prices in 2013 and oil prices in late-2014.

With the deterioration of the current account and the continuation of the exchange rate peg in an environment of worsened terms of trade, financial account outflows from the private sector continued. This resulted in a strong and continued decline in net international reserves of the CBvS. International reserves, which were US$1.0 billion at the end of 2012, decreased to US$330.2 million by the end of 2015. The Government’s economic reform program, which began in August 2015, included tight fiscal and monetary policies and a devaluation of the SRD and a shift to a flexible exchange rate regime, which had the effect of s the decline in international reserves.

The effects of the depreciation of the SRD were noticeable by the end of 2016. The current account deficit decreased from US$786 million in 2015 to a deficit of US$170 million in 2016, largely due to a 38.3% decrease in imports in 2016 compared to 2015. In 2017, the current account recorded a US$61 million surplus, largely due to a 41.4% increase in exports driven by the full-year impact of operations at the Merian gold mine, which started production in late 2016. However, the new gold mine also brought about accelerated depreciation of mining assets, which translated into an increase in profit remittances by Newmont Goldcorp Suriname, causing a decrease in the income account of the current account of the balance of payments by approximately US$218 million in 2017 compared to 2016. In 2018, the current account recorded a deficit of US$118 million, as imports of goods and services grew at a faster rate than exports. A rapid increase in imports of investment goods and services in the first half of 2019 led to an increase in the current account deficit in the first half of 2019.

41 The following table sets forth Suriname’s balance of payments for the periods indicated.

Balance of Payments

For the Year Ended December 31, 2014 2015 2016 2017(1) 2018(1) (US$ millions) Current account (416.4) (786.4) (169.7) 60.9 (117.9) Goods 133.0 (375.9) 186.7 672.0 547.1 Exports 2,145.3 1,652.3 1,438.7 2,034.5 2,129.1 Imports (2,012.3) (2,028.2) (1,252.0) (1,362.5) (1,582.0) Services (550.2) (462.6) (282.6) (316.7) (380.3) Credit 210.7 204.2 186.5 160.6 172.1 Debit (760.9) (666.8) (469.1) (477.3) (552.4) Income (70.3) (13.3) (175.6) (394.0) (387.5) Current transfers 71.2 65.3 101.8 99.7 102.7 Inflows 151.4 139.4 161.5 155.4 160.8 Outflows (80.2) (74.1) (59.7) (55.7) (58.0)

Capital account (0.4) 1.3 19.4 0.0 (0.4)

Financial account 696.9 769.7 490.2 177.7 298.2 Direct investment 164.1 266.7 309.2 163.3 119.2 of which: In Suriname 164.1 266.7 309.2 160.9 190.2 Portfolio investment 0.6 (9.5) (42.1) (30.2) (58.5) Other investment 532.2 512.4 223.1 44.6 237.5 Errors and omissions(2) (430.3) (250.2) (260.5) (216.9) (32.0) Change in reserves 150.2 265.8 (79.4) (21.7) (147.9)

International reserves 625.1 330.2 381.1 424.4 580.7 - in months of imports of goods and services 2.7 1.5 2.7 2.8 3.3 ______(1) 2017 and 2018 current account data were restated due to errors in data provision in the mining sector. Figures in this table are restated figures. (2) Errors and omissions reflect the net imbalances resulting from timing differences and imperfections in source data and compilation of the balance of payments accounts. Source: CBvS.

Current Account

After an average surplus of 7% of GDP during 2007-2012, Suriname’s current account went into deficit in 2013 due to investments in the oil industry of approximately 18% of GDP in 2013-2015, due to investments in the mining sector of approximately 20% of GDP during 2015-2016 and, to a lesser extent, due to the decrease in gold and oil prices.

Investments of approximately US$800 million in the Staatsolie refinery expansion project between 2013 and 2015 and approximately US$1 billion in the Merian gold mine from 2014 to 2016 were the main drivers of the current account deficits in 2013 through 2016, as imports of goods and services for these investments affected the current account. World market prices for gold and oil decreased by approximately 50% during 2013-2014. Export volumes of oil and alumina did not change materially from 2013 to 2016, but export values of gold decreased by approximately 13% during this period as informal gold miners reduced output and the Rosebel gold mine reduced output reflecting a retooling of the mill to process more hard rock.

42 Gold production by the Surinamese affiliates of multinational gold companies decreased during 2013-2016 based on relative cost considerations, which decrease more than offset the increase in output by small scale producers. As a result, mining export revenue declined significantly in 2014 compared to 2013. The value of non-mining exports increased in 2014, although not enough to prevent a US$249 million decrease, or approximately 10%, in total exports in 2014 as compared to 2013. Largely due to CBvS interventions, the exchange rate remained stable in 2014 and the level of imports decreased by only 7% in 2014 compared to 2013.

The current account deficit widened to US$416 million or 7.5% of GDP in 2014 from US$196 million or 3.9% of GDP in 2013, as compared to a surplus of 3.3% of GDP in 2012. The services deficit widened to US$550 million in 2014, mainly due to payments for business and technical fees for construction abroad in connection with the Staatsolie refinery expansion project. Net outgoing income payments of US$53 million in 2014 were less than half of their level in 2013, mainly due to a lower transfer of profits by subsidiaries of foreign companies. Inflows of personal transfers did not change materially, whereas outflows decreased by US$6.4 million. On balance, US$71 million was received as transfers. The current account deficit widened further in 2015 to US$786 million (16.5% of GDP) mainly due to a 23% (US$493 million) decrease in exports and the continued high level of imports related to the construction of the Merian gold mine. The services account deficit also continued in 2015, although at a lower level than in 2014, as construction activity for the Staatsolie refinery expansion project was winding down.

In 2016, the current account deficit decreased to 5.5% of GDP, as compared to 16.5% of GDP in 2015. This decrease was mainly driven by the trade balance, which changed from a US$376 million deficit to a US$187 million surplus as imports contracted sharply and notwithstanding a continued decline in exports. Similarly, services imports declined sharply resulting in a decrease in the services deficit from US$463 million to US$283 million. The income account registered an increase in outflows as income remittances from mining companies increased. The income account, excluding non-financial public sector interest, changed from a surplus of US$5.5 million in 2015 to a deficit of US$129 million in 2016. The transfer account also registered a net increase as incoming transfers increased while outgoing transfers decreased.

In 2017, the improvement in the current account continued with a surplus of US$60.9 million. This improvement was entirely due to exports, which increased by US$596 million, or 42%, as compared to 2016. Imports increased by US$100 million, while the services account deteriorated by US$34 million. The income account registered a 193% increase in outflows in 2017 as compared to 2016, mainly attributable to mining companies transferring income abroad in 2017. The income account deficit increased by US$218 million from 2016 to 2017. The transfers account did not change materially from 2016 to 2017.

In 2018, the current account deteriorated by approximately US$179 million as compared to 2017, to a deficit of 3.5% of GDP. This was largely due to an increase in imports of goods and services. The increase in imports was partly attributable to a restocking of transport equipment after the economic crisis period of 2015 and 2016, although the largest increase in imports was registered in the category of machinery as investment in the private sector rebounded after the economic crisis. The main driver of the increase in imports in 2018 is imports of machinery and transport equipment goods imported by the mining sector, and this trend has continued into 2019. Outbound income transfers by mining companies continued at 2017 levels with the continued accelerated depreciation of the original mining investments.

The current account in the nine months ended September 30, 2019 reflects a continuation of the trends in 2018. The current account deteriorated significantly, as exports of goods and services did not change materially as compared to the nine months ended September 30, 2018. In contrast, imports of goods and services increased sharply as imports of machinery and transport goods increased by 21% compared to the nine months ended September 30, 2018, while services imports increased by 29% as compared to the nine months ended September 30, 2018.

Exports

Suriname’s most important export products are gold and oil. While alumina production in Suriname ceased in December 2015 with the closure of the last part of the Suralco alumina refinery, it could resume in the future. Historically, Suriname primarily exported bauxite or alumina. Suriname also previously exported aluminum, until the Alcoa-owned aluminum smelter was closed in 1999.

43 Revenue from exports decreased from approximately US$2.1 billion in 2014 to US$1.6 billion in 2015 due to the full impact of the oil price decline and the continued decline in alumina exports. While alumina exports accounted for approximately one quarter of Suriname’s exports in 2010, they only accounted for 14% of exports in 2015 and ceased entirely in early 2016. In each year from 2010 to 2015, gold exports amounted to approximately 55% of exports, but this share has increased since 2016 due the ending of alumina exports and a significant decline in oil exports and the beginning of production at the Merian gold mine in late 2016.

Gold. Gold exports became meaningful in 2004 in Suriname with the establishment of a commercial gold mine and mill at Rosebel. The Rosebel gold mine produced just over three million ounces of gold in the mine’s first 11 years of production. Increased in gold exports during that period were also attributable to increased operations by artisanal and small-scale miners. Export volumes of gold decreased from a peak in 2012 by approximately 13% in 2013 as informal gold miners reduced output and the Rosebel gold mine reduced output reflecting a retooling of the mill to process more hard rock. Gold export volumes decreased again by 11% in 2014 as compared to 2013, and they remained stable in 2015 and the first half of 2016. The addition of the Merian gold mine, which commenced operations on October 1, 2016, has increased Suriname’s gold export volumes significantly. Gold exports increased from US$917 million in 2015 to US$1,037 million in 2016. As a result of the full-year impact of the operations at the Merian gold mine, gold exports increased to US$1,609 million in 2017. In 2018, gold exports increased slightly to US$1,632 million.

Newmont Goldcorp Corporation controls a very large area of interest and within it has already secured additional concessions. Newmont Goldcorp Corporation is currently preparing to begin operations in a new mine as Sabajo in 2024, while exploring the Maraba concession with a view to beginning operations in 2020. In addition, exploration is ongoing at its Amazonia North and Amazonia South concessions.

In early 2018, IAMGOLD Corporation was awarded two new gold mining concessions, Saramacca and Bronkolonko, as a 70%-30% unincorporated joint venture with the Government. IAMGOLD Corporation began production in the new Saramacca gold mine in October 2019, adjacent to the existing Rosebel gold mine, and is currently exploring its new Bronkolonko concession. Production in Saramacca will increase gold output in 2020 and beyond. More importantly, IAMGOLD Corporation will not have to mine hard rock at the Saramacca concession, significantly reducing costs and increasing the ore throughput in the mill. The Government has asked Staatsolie to evaluate the possibility of taking ownership of the Government’s share. See “Public Sector Finances – Large-Scale Oil and Gold Projects.”

Oil. As a result of the completion of the Staatsolie refinery expansion project, oil trade in Suriname has been significantly altered. Previously Suriname exported crude oil at a discount and imported refined petroleum products such as gasoline and diesel. Following the start of operations of the expanded refinery in 2016, Suriname has ceased exporting crude oil and has significantly reduced imports of refined petroleum products from an average of 55 million liters per month prior to the operation of the expanded refinery to an average of approximately 35 million liters per month. Suriname continues to import kerosene and jet fuel and exports diesel and bunker fuel.

Alumina. Beginning in 2008 with the international decline in alumina prices and continued oversupply in world markets, alumina production in, and exports from, Suriname decreased substantially, and the alumina sector operated at a low level of production and profitability for several years. In December 2015, alumina production in Suriname ceased with the closure of the last part of the Suralco refinery, and alumina exports ceased in early 2016. It is possible that Alumina production in Suriname will resume in the future.

Non-traditional products. Suriname also exports timber, rice, bananas, fish and shrimp, vegetables and other products. These exports collectively represented on average 11% of exports during from 2010 to 2014. After the economic crisis period of 2015 and 2016 and notwithstanding the strong increase in gold exports, non-mining exports have accounted for approximately 16% of Suriname’s total exports. The relative increase is due to a significant increase in timber and vegetable exports during this period. Exports of timber, which consist exclusively of high value specialty timber, increased from US$30 million in 2014 to US$60 million in 2017 and to US$70 million in 2018. The increases were due to investment by Chinese companies in the Suriname logging industry. Exports of bananas, which are sold in the European markets, have declined from US$33 million in 2014 to US$20 million in 2016 and US$17 million in 2018. Rice exports declined to a lesser extent during this period, from US$55 million in 2014 to US$41 million in 2016 and to US$36 million in 2018.

44 The following table sets forth Suriname’s merchandise exports by groups of products for the periods indicated.

Merchandise Exports by Groups of Products

For the Year Ended December 31, 2014 2015 2016 2017 2018 (US$ millions) Exports of goods 2,145.3 1,652.3 1,439.4 2,034.4 2129.1

Traditional products 1,849.3 1,305.7 1,194.9 1,787.5 1,838.4 Gold 1,169.9 916.5 1,036.7 1,608.8 1,631.6 Alumina 351.1 232.7 7.9 - - Petroleum products 328.4 156.4 150.3 178.7 206.8

Non-traditional products 295.9 346.5 244.5 246.9 290.7 Rice 55.0 45.2 40.8 30.4 35.5 Shrimp and fish 37.2 37.8 33.2 39.4 43.3 Bananas 32.7 24.3 20.3 20.6 17.1 Timber 29.8 32.3 40.0 59.9 70.0 Other goods 141.2 206.9 110.2 96.6 124.8 (as a percentage of total) Exports of goods 100 100 100 100 100

Traditional products 86 79 83 88 86 Gold 55 55 72 79 77 Alumina 16 14 1 - - Petroleum products 15 9 10 9 10

Non-traditional products 14 21 17 12 14 Rice 3 3 3 1 2 Shrimp and fish 2 2 2 2 2 Bananas 2 1 1 1 1 Timber 1 2 3 3 3 Other goods 7 13 8 5 6 ______Source: ASYCUDA and direct reporting.

Exports by Destination

As Suriname is a commodity exporter, the specific destination countries of its exports is not regarded as important and such countries have changed significantly over the years. Approximately 86% of Suriname’s exports in 2018 were commodities, mainly gold and oil. In 2018, the largest destinations of Suriname’s exports were The Netherlands, Switzerland, the UAE, Belgium, the United States, and Canada.

Gold is exported to Switzerland, the UAE, Hong Kong, Belgium and Canada for further shipment or refining. In 2018, approximately one-fifth of the gold exports were to the UAE, as artisanal gold was purchased by the UAE gold mint Kaloti. The gold purchased by Kaloti is now partially refined in Suriname before being exported to the UAE. Rosebel Gold Mines and Newmont Goldcorp Suriname, the two large joint venture gold mining companies operating in Suriname, handle their own gold exports.

Historically, Suriname’s oil was exported mostly to Trinidad and Tobago for refining, while Suriname’s oil traders purchased refined petroleum products mainly from Trinidad and Tobago. Oil exports began declining in late 2016 as the expanded refinery began operations, and crude oil exports ceased in 2017 as a result of the completion of the expanded refinery, altering accordingly the composition and destination of Suriname’s exports.

45 Suriname’s agricultural products such as bananas and rice are usually exported to Europe, while timber is mostly exported to China.

Imports

Imports to Suriname are driven by the need to import most consumer and investment goods, which are not produced in Suriname. Imports before 2016 consisted mainly of refined petroleum products, machinery and electrical products. The relative importance of imported refined petroleum products declined considerably after the expanded Staatsolie oil refinery began operations. Import levels generally fluctuate, depending on the changing import needs of the mining industry, large-scale investment projects and fluctuations in domestic consumer and investment demand. Imports represented approximately 39% of GDP during the period from 2010 through 2014. After the economic crisis period of 2015 and 2016, and reflecting the pent-up demand and strong rebound in investment activity, imports accounted for 46% of GDP in the period of 2017 and 2018. Investment-related imports of goods and services for the Staatsolie refinery expansion project and the Merian gold mine project increased imports by an estimated cumulative 38% of GDP during over the period from 2013 through 2016. This import demand ceased following the completion of the Staatsolie refinery expansion project and the Merian gold mine project. The corresponding decline in imports has been partially offset by an increase in imports related to the operations of the mine and the mill at the Merian gold mine.

As a result of the Staatsolie refinery expansion project, imports of services increased because construction services were carried out by a European company. Beginning in 2017, following the commencement of operations at the expanded oil refinery in 2016, Suriname significantly reduced imports of gasoline and diesel on a net basis, but it continues to import kerosene and jet fuel. The sharp decline in the net oil trade has benefitted Suriname’s balance of payments. It also provides a buffer against the impact of the volatility in the international oil price on the Surinamese economy, its balance of payments and fiscal revenue to the Government.

Imports of goods and services again increased sharply in 2018 and further in the six months ended June 30, 2019 as mining companies are in the process of opening new mining sites to provide ore to their mills.

The following table sets forth Suriname’s merchandise imports by type of goods in U.S. dollars for the periods indicated.

Merchandise Imports by Type of Goods (CIF) For the six months ended For the Year Ended December 31, June 30, 2014 2015 2016 2017 2018 2019 (US$ millions) Mining products 503.0 364.6 258.0 239.9 292.6 172.6 of which: fuel, oils and oil products 473.4 333.1 223.6 217.7 269.2 160.1 Machinery 397.3 448.1 260.8 319.9 368.1 208.9 Transportation 199.1 195.3 83.9 107.7 127.9 94.8 Chemicals 163.9 179.5 119.9 128.4 136.1 68.0 Foodstuffs 154.9 153.6 114.4 122.4 125.1 68.7 Other 594.1 686.6 415.0 444.3 532.2 287.1 Total imports 2,012.3 2,027.6 1,252.0 1,362.5 1,582.0 900.1 ______Source: ASYCUDA and direct reporting.

46 The following table sets forth Suriname’s merchandise imports by type of goods as a percentage of total imports for the periods indicated.

Merchandise Imports by Type of Goods For the Year Ended December 31, 2014 2015 2016 2017 2018 (as a percentage of total imports) Mining products 25 18 21 18 18 of which: fuel, oils and oil products 24 16 18 16 17 Machinery 20 22 21 23 23 Transportation 10 10 7 8 8 Chemicals 8 9 10 9 9 Foodstuffs 8 8 9 9 8 Other 30 34 33 33 34 Total imports 100 100 100 100 100 ______Source: ASYCUDA and direct reporting.

Imports by Origin

The United States represents the largest source of Suriname’s imports, accounting for approximately one- quarter of all imports. Imports from the United States consist primarily of consumer goods but also include primary and intermediate inputs for the mining and oil industries. China and The Netherlands accounted for 9% and 13%, respectively, of total imports in 2018.

Merchandise Imports by Country of Origin For the Year Ended December 31, 2014 2015 2016 2017 2018 (US$ millions) Americas United States 444.0 483.4 311.8 370.8 439.1 Trinidad and Tobago 198.7 165.5 199.9 142.2 97.9 Canada 9.7 55.9 28.5 19.9 19.1 Guyana 9.2 14.9 10.5 13.7 8.6 Europe Netherlands 282.4 280.7 176.6 189.5 206.2 Belgium 15.1 36.6 18.7 17.7 15.6 Asia China 129.5 126.4 77.7 98.1 136.0 Japan 60.4 67.9 26.6 26.7 37.0 Total 2,012.3 2,028.2 1,252.0 1,362.5 1,582.0 ______Source: ASYCUDA and direct reporting.

Capital and Financial Accounts

While the capital account is immaterial in light of the absence of foreign aid and limited capital transfers, the financial account is of major importance in Suriname. This reflects the freedom of capital transactions and the close integration of local companies and the local population with foreign companies, expatriates and others living abroad. The financial account has historically experienced deficits, as outbound investments and portfolio capital movements dominate.

The oil refinery expansion project undertaken by Staatsolie in 2013-2015 was financed by Staatsolie’s balance sheet and by foreign borrowing, both accounted for in the financial account of the balance of payments. It increased the inflows in the portfolio and private capital flows by a cumulative amount of approximately US$1 billion during 2013-2015.

47 FDI in Suriname has reflected the well-established tradition of partnership with multinationals investing in natural resources. For almost a century, foreign companies such as Alcoa have invested in Suriname in the mining sector, in particular the bauxite, alumina, and aluminum mining and manufacturing industries. In November 2014, the Government signed a US$1 billion agreement with Newmont Mining Corporation for the development of the Merian gold mine. While 25% of the joint venture company Newmont Goldcorp Suriname has been owned by the Government and later by Staatsolie, the investment by Newmont Goldcorp Corporation into this mine required substantial FDI, estimated to have amounted to approximately US$1 billion during 2015-2016.

Kaloti, a UAE gold trading company, invested in Suriname for the construction of a US$55 million weighing station and mint in 2014-2015.

The financial account has been in surplus since 2012. Net capital inflows peaked at US$770 million in 2015 reflecting increased investment-related capital inflows into Suriname. With the completion of the two large projects, the Staatsolie refinery expansion project and the completion of the Merian gold mine project, the surplus in the financial account decreased to US$492 million in 2016. The economic crisis also led to strong portfolio capital outflows. A surplus in the financial account was maintained in 2016 due to the issuance of Suriname’s inaugural international bond of US$550 million in October 2016.

In 2017, the surplus in the financial account decreased further to US$175 million. In 2017 there was a significant underlying reduction in capital outflows as the economic crisis subsided. Portfolio and other investment assets, excluding the 2016 international bond issuance, improved from a net outflow of US$327 million to a net inflow of US$45 million. FDI flows remained positive at US$109 million despite the completion of the Staatsolie refinery expansion project and Merian gold mine project. Some of these FDI flows constituted reinvested earnings from the two large gold mines.

In 2018, the surplus in the financial account increased significantly to US$298 million. Net FDI inflows decreased to US$119 million, while other net capital inflows improved further from US$45 million to a total net inflow of US$238 million. This improvement came despite a significant increase in portfolio assets invested by residents (including banks and monetary authorities) abroad, which increased from a net outflow of US$11 million in 2017 to a net outflow of US$104 million in 2018.

In the first nine months of 2019, the surplus in the financial account increased by 141% compared to the first nine months of 2018. The increase is largely due to an increase in capital repatriation by residents through the banking system to finance investments in the mining sector, and also due to capital repatriation by banks in order to deposit part of their required reserves in the CBvS.

International Reserves

Changes in international reserves are the net result of the current, capital, and financial accounts of the balance of payments, plus errors and omissions and valuation changes. Consequently, the changes in international reserves since 2014 have reflected the significant shifts in the current account due to the economic crisis period of 2015 and 2016 and the rebound following such crisis period and the large investments in the oil and gold sectors and their consequent commencement of operations, together with capital movements to finance those investments, the Republic’s international bond issuance in 2016, and capital movements in response to changes in confidence of residents before, during, and after the economic crisis. See “Monetary and Financial System – International Reserves.”

48 Regional Integration and Free Trade

Suriname has benefited from regional trade initiatives that have opened the markets of Caribbean nations to other nations in the region. In recent years, Suriname has focused on bolstering its regional relationships through its membership in CARICOM and UNASUR.

CARICOM

On July 4, 1995, Suriname became a full member of CARICOM. Suriname eliminated tariffs on products imported from CARICOM countries on January 1, 1996, and adheres to the CARICOM common external tariff regime with most tariff rates in the 5 to 20% range. As of January 1, 2008, Suriname began eliminating import duties on many goods imported from the EU due to the Economic Partnership Agreement between the EU and CARICOM countries. Suriname has played an integral part in the regional integration process since becoming a member of CARICOM. The Republic held the CARICOM chairmanship during the first half of 2012.

MERCOSUR

Suriname became an associate member of MERCOSUR in 2013. Associate members are not members of the customs union and do not have voting power in Mercosur’s political bodies, though they do have preferential trade access to the market.

Other Free Trade Agreements

As a former Dutch colony, Suriname is also a part of the African, Caribbean and Pacific Group of States, (the “ACP Group”). Its membership in the ACP Group has provided preferential access for its agricultural products to European markets, specifically rice and bananas. However, preferential access to the EU market under ACP Group membership has been waning in recent years. Suriname has a double taxation avoidance treaty with the Netherlands and with Indonesia.

Foreign Direct Investment Policy

Suriname has a well-established tradition of partnership with multinationals investing in the natural resources sector. In November 2014, the Republic signed a landmark agreement with Newmont Goldcorp Corporation for the development of the Merian gold mine concession and a very large area of interest for future investments pursuant to the Newmont Goldcorp Suriname joint venture. The Newmont Goldcorp Suriname agreement was entered into despite the decline in gold prices, which the Government believes was due to the attractiveness of Suriname’s framework for FDI and the relatively low extraction costs in Suriname. Since 2016, when investment in the mill and mine at the Merian gold mine were completed and mining operations began, FDI has decreased. Nonetheless, Newmont Goldcorp Suriname maintains development investment in Suriname to prepare further mines for operations, such as at Maraba and Sabajo, while exploration continues at Merian, Sabajo, Maraba, and more distant mining concessions in the south of Suriname, such as at Amazonia South and Amazonia North.

In addition, in August 2014 Suriname entered into a joint venture with IAMGOLD Corporation, a Canadian gold producer, which owns 95% of the Rosebel Gold Mines joint venture company, for further resource development in the surrounding areas of the Rosebel gold mine, in particular the Saramacca and Bronkolonko concessions. Under the agreement, IAMGOLD Corporation has the ability to acquire exploration and exploitation rights in a wide zone around the existing Rosebel gold mine concession, which should lengthen the economic lifespan of the Rosebel mill if exploration proves successful in the new concessions. Under the agreement, the Republic has the right to participate with up to a 30% ownership in any new concessions in the area of interest. See “Public Sector Finances – Large-Scale Oil and Gold Projects.”

Suriname has maintained a positive relationship with Alcoa despite Alcoa’s cessation of alumina production in Suriname in late-2015 when the last part of the Suralco refinery was closed. In August 2019, the Suriname Parliament approved the termination of the 1958 Brokopondo Agreement and a modification of post-mining

49 obligations of Suralco, as a result of which the Afobaka HPP will be transferred to the Government or a Government- owned entity following the settlement of arrears owed by the Government to Suralco in relation to the Afobaka HPP.

The Government’s economic reform program includes plans to implement initiatives to promote the economy’s diversification and to attract FDI. Of particular importance is the agricultural sector, which in 2018 accounted for approximately 10% of total export earnings, second to mining, and approximately 17% of the labor force. The Government also plans to update the institutional and legal framework laying out investor protections and guarantees for investment and eliminating exchange restrictions regarding investment income transfers and controls related to FDI flows. In this context, the Government has been working with the World Bank and with the IDB since 2017 to update the investment policy framework and reduce the cost of doing business in Suriname through a streamlining of regulations.

Investment Promotion and Protection Laws

Suriname has no significant controls on foreign investment. International investors are required to register foreign direct investment with the Foreign Exchange Commission, which guarantees their ability to repatriate funds from such investments.

50 MONETARY AND FINANCIAL SYSTEM

The Central Bank of Suriname (CBvS)

The CBvS is the monetary authority of the Republic and acts as the regulator of the financial sector, banker to the commercial banks, and cashier and banker to the Government. The CBvS was founded in 1957 and has played a crucial role in the financial and economic development of Suriname. Its core objective is to preserve the purchasing power of the SRD through the conduct of monetary policy and reserve accumulation. The CBvS is also charged with the supervision of the banking, credit union, insurance and pension sectors.

The six main laws that govern the financial sector of Suriname are: (1) the Bank Act 1956, as amended in 2010, which provides for the regulation of the central banking system in Suriname, (2) the Banking and Credit System Supervision Act 2011, (3) the Pension and Provident Fund Act 2005, (4) the Banking and Credit System Supervision Act 1968 (for insurance companies), (5) the Foreign Exchange Houses and Money Transfer Companies Act 2012, and (6) the Capital Market Act 2014. A draft law on the establishment of the first credit bureau has been submitted to the National Assembly. The CBvS is currently finalizing a draft of a bank resolution law (the “Bank Resolution Law”) and is in the process of finalizing a law on a deposit insurance scheme (the “Deposit Guarantee System Law”) which is expected to be considered by the National Assembly after the Bank Resolution Law is approved.

The CBvS is independent of the Government and monetary policy is planned, developed, and implemented independently by the CBvS. However, the Minister of Finance is the spokesperson for monetary policy before the National Assembly. The CBvS is headed by the Governor, who is appointed by the president of the Republic for a fixed five-year term. The Governor reports to a supervisory board (the “Supervisory Board”), whose members are appointed by the Minister of Finance to fixed five-year terms. The Supervisory Board can have as many as seven members and currently has five members. The Supervisory Board is required to meet once per quarter, though meetings can also be called by the Governor and by the chairman of the Supervisory Board. The career employees of the CBvS are not part of the Government’s civil service and can be hired and fired at will. The technical staff of the CBvS typically remains stable through the tenure of different governments, CBvS Governors and members of the Supervisory Board. The budget of the CBvS is not determined or subject to approval by the National Assembly.

The current Governor of the CBvS is Robert van Trikt, who was appointed in March 2019. The previous Governor was Glenn Gersie, who held the position of Governor from February 2016 to February 2019. The current Minister of Finance, Gillmore Hoefdraad, held the position from October 2010 to August 2015.

51 Analytical Accounts

The analytical accounts of the CBvS are equivalent to the CBvS’s balance sheet, but arranged in a form that allows for an economic analysis of the impact of changes in the accounts on the economy.

Analytical Accounts of the CBvS(1) As of October As of December 31, 31, 2014 2015 2016 2017 2018 2019 (SRD millions) Foreign assets (net) 1,672.4 378.7 1,139.5 511.3 1,988.1 2,651.0 Foreign assets 2,100.9 1,415.0 3,479.6 3,163.1 4,552.0 5,113.2 Foreign liabilities 428.5 1,036.3 2,340.1 2,651.7 2,563.9 2,462.2

Claims on Government (net) 551.8 2,218.0 1,435.9 1,947.3 1,797.2 3,306.1 Claims on Government 641.8 2,507.6 2,438.0 2,361.0 2,354.1 3,468.0 Liabilities to Government 90.0 289.6 1,002.1 413.7 556.9 161.9 of which: in foreign currency 110.4 273.7 1,186.5 597.7 752.3 349.7

Claims on other depository corporations 101.2 163.1 33.7 236.5 39.1 619.5 of which: in foreign currency 51.8 6.6 8.8 89.0 33.1 685.8

Claims on other resident sectors 12.2 12.1 12.0 11.9 16.0 20.7

Shares and other equity 171.5 193.9 (168.0) (608.0) (628.9) (578.7)

Other assets/liabilities (net) (32.7) (23.8) (215.1) (359.2) (506.0) (1,443.3)

Monetary base 2,198.8 2,601.8 3,004.2 3,674.2 4,975.3 8,691.5 Currency in circulation 1,114.3 1,124.3 1,384.1 1,549.8 1,756.5 1,942.4 Liabilities to other depository corporations 996.5 1,344.4 1,544.5 1,995.1 3,092.4 6,541.1 Liabilities to other resident sectors 88.0 133.0 75.6 129.4 126.3 208.0 ______(1) All figures in table are preliminary data. Source: CBvS.

Monetary Policy

The CBvS has historically implemented its monetary policy primarily through reserve requirements. Foreign currency deposits were introduced in 1992, while foreign currency credit was formally permitted in 1995. The economic crises in the 1990s led to a partial dollarization of the economy and about a third of banking loans and half of banking deposits are denominated in foreign currencies. A higher reserve requirement ratio for foreign currency is a macroprudential tool to discourage foreign borrowing and encourage a gradual de-dollarization of the financial system and the economy. The lending and deposit dollarization ratios have declined gradually after the economic crisis, reflecting an increased confidence in the national currency.

The slowdown in credit extension by commercial banks in 2014 was a result of monetary tightening. In January 2013, the required reserve ratios for foreign currency deposits were increased, and in September 2013, the mandatory foreign currency reserves ratio and the mandatory SRD reserves ratio were raised. At the same time, and in defense of the exchange rate peg, the CBvS undertook foreign exchange market interventions through the banking system starting in 2013, which gained momentum in 2014. Banks engaged twice in a foreign-for-local currency swap with the CBvS in a forward repurchase agreement in 2014. This allowed a replenishment of international reserves held by the CBvS. The policy proved insufficient to contain exchange rate pressures and the Government decided in 2015 as part of the economic reform program to modify the exchange rate regime to a flexible regime. The policy was initiated with a devaluation and a wider exchange rate band in late-2015.

52 With the introduction of a flexible exchange rate regime, the CBvS is gradually adapting its policy-setting framework and has expanded the indirect monetary policy instruments at its disposal. Its aim is to maintain price stability, to enhance the proper functioning of the foreign exchange market and to manage credit growth in the economy, while protecting the health of the financial sector. Institutional and operational reforms, which have been introduced include the following:

 The monetary anchor will be gradually shifted from the exchange rate peg to a quantitative monetary anchor, requiring the introduction of more indirect monetary policy instruments.

 To manage liquidity in the system and achieve the monetary target, the CBvS has set excess liquidity of the commercial banks as its operational target.

 An Open Market Operations department has been set up, which is mainly responsible for liquidity monitoring and forecasting and the operations of the monetary policy instruments.

 The CBvS has established a Monetary Policy Advisory Committee (MPAC) in 2019 to analyze the liquidity stance in the banking system and the wider economy, monetary policy developments, suggest policy adjustments if necessary. The MPAC's primary objective is to inform the Deputy Governor of Monetary and Economic Affairs on the liquidity stance of the domestic banking system and to recommend appropriate monetary policy instruments and actions to maintain banking liquidity at levels deemed conducive to price stability.

 The CBvS has expanded its monetary instruments with a permanent deposit facility and lending facilities, which will improve the CBvS’ liquidity management and promote interbank money market operations. Ongoing efforts are being made to strengthen the macroeconomic and liquidity forecasting system, which are supported by the related reform being undertaken by the Ministry of Finance to establish a modern Treasury department. In addition, a Commercial Bank Credit Oversight Committee (CBCOC) was appointed by the Governor in 2019 to regularly review, oversee and analyze the developments and conditions (e.g. collateral requirement, interest rates, counterparty limits, etc.) of the standing facilities.

 The Bank Act is being amended to give the CBvS greater autonomy in the implementation of monetary and exchange rate policy.

Monetary policy has been tightened significantly as excess liquidity is being sterilized and this tight policy is bound to continue. The tightening was necessary to limit liquidity that market participants could use to speculate against the local currency directly, or indirectly through foreign asset accumulation. The Government expects tighter liquidity to limit depreciation pressures and thereby limit inflation pressures, and it expects a higher reserve coverage of the monetary base to reduce depreciation expectations. The tools that the CBvS is using to constrain liquidity growth in real terms include the following:

 Reserve requirements. The CBvS has already raised required reserve ratios on local and foreign currency deposits to high levels. Further tightening may be considered if more indirect instruments prove to be insufficient, after taking into account the liquidity draining effect of the foreign exchange sales, and the implications for banking sector stability.

 Central Bank term deposits and paper: The CBvS is actively absorbing excess liquidity in the banking system by offering new investment instruments to financial institutions, namely term deposits, gold certificates, and Central Bank Certificates of Deposit.

 Liquidity management facilities. The CBvS introduced standing facilities in September 2019, which include an intra-day lending facility, a short-term lending facility, facility, emergency liquidity assistance, and a deposit facility. For this purpose, the CBvS had established an Open Market Operations Department (OMO) within the Monetary and Economic Affairs Directorate, as recommended by the IMF. The operational responsibility for liquidity monitoring is a key task of the department. This department is also responsible for the operations of the following instruments to manage/regulate liquidity: short-term deposits, gold certificates

53 and Central Bank certificates of deposit. Furthermore, the Central Bank implemented circulars for the intraday liquidity facility, the lending facility, deposit facility and the emergency liquidity assistance on September 26, 2019 and the operations of these facilities are part of this department. Additionally, OMO is responsible for the communication with stakeholders regarding open market operations.

In addition, the Government considers limiting monetary financing of the Government to be critical for controlling liquidity. Until May 2016, the CBvS was legally permitted to lend the Government up to a maximum of 10% of the Government’s projected revenue. A temporary Memorandum of Understanding signed between the monetary authorities in May 2016 to suspend monetary financing during the crisis years was revoked in January 2019 against a backdrop of improved macro-economic conditions such as low inflation and a stable exchange rate. At the same time, the Government has submitted a draft amendment of the Bank Act to eliminate monetary financing of the Government by eliminating Article 21 of the Bank Act.

Supervision of the Financial System

The financial sector is regulated by the Supervision Directorate of the CBvS. The authority of the CBvS over the financial system has been steadily expanding in recent years. This expansion began in 2005 with pension fund regulatory legislation. In 2011, the National Assembly passed the Banking Supervision Act, under which the authority of the CBvS broadened from merely imposing liquidity requirements to include regulation of capital requirements, insider lending, and fixed assets. Since then, the CBvS has revised existing regulations and issued new ones, including the Corporate Governance Code, Guideline Corporate Governance, Fit & Proper, Integrity, Internal Audit, Internal Control, Interest risk management, Liquidity risk management, and Guideline Open Foreign Currency Position.

The banks in Suriname are going through a transition period, as the Bank is strengthening regulations, and implementing new and revised standards, while the deadline for implementation of the law on financial reporting is closing in. Banks are transitioning to IFRS 9 and within this scope and regulatory requirements of the Bank, they are implementing and reinforcing risk management frameworks and good governance.

Banks need to be compliant with IFRS beginning with the 2020 financial reporting year. This will also require 2019 figures comparison, which must be prepared in accordance with the IFRS standards as well. The Banking Supervision Department of the CBvS had discussions with the largest banks on the impact of the new regulations that will be implemented in 2020 for all institutions within the financial sector, which will result in fortifying the following significant items within the banks: Risk Management Framework; Supervision (Supervisory Board and external supervision); Internal Audit Framework; Reporting including key ratio’s from the banks to the Central Bank will be IFRS compliant; Loan classification and provisioning regulation updates; Compliance with laws- and regulations.

In 2012, the National Assembly passed a law to regulate Money Transaction Offices (cambios and money transfer offices). After the Banking Supervision Department took over prudential and integrity supervision of the Cambios, measures were taken to regulate the sector, including a strict monitoring of the right execution by market participants of the Law on Money Transaction Offices; strict assessment of renewal applications for licenses; assessment of professionalism of supervisory board members and management and independency of the supervisory board; assessment of a real time foreign exchange transactions monitoring system; on-site inspections were intensified and enhanced; AML/CTF inspections were fully incorporated; assessment of the performance of the governance, including performance of the supervisory board and management; administrative organization and internal control; availability of an auditors’ report with auditor’s opinion and follow-up of possible remarks; follow-up of last time on- site inspection.; and correctness and completeness of reporting. Since the transfer of the supervision of cambios to the Banking Supervision Department, several meetings were held with members of the supervisory boards of Cambios and information sessions were held with the cambios on compliance, NRA, and 4th MER.

CBvS prohibits financial institutions from offering more than one type of financial service. For example, a bank may not offer insurance products. They can only operate as an agent for insurance companies.

CBvS has full supervisory authority over all state-owned banks and all regulations are equally applicable to state-owned and private sector banks. The frequency of bank examinations for other banks is determined by the CBvS banking supervision department, based on the Camels rating for the prudential part. In 2018, a separate rating for AML/CTF on-site inspections was implemented. On-site inspections concentrate on effectiveness and execution and

54 not only on policy. The ratings are: Compliant, Largely Compliant, Partially Compliant, and Non-Compliant, in accordance with the ratings used by the CFATF. The reports are detailed and the institution has to prepare a plan of action including a time frame. The institution has to regularly report the progress.

The global financial crisis had no direct material impact on the Surinamese banking system. Nevertheless, CBvS moved to upgrade its internal arrangements for monitoring and safeguarding the soundness and stability of the financial sector.

CBvS is closely monitoring the impact of the exchange rate realignment on the economy and on the financial sector. Widespread dollarization and the fixed exchange rate may have created currency mismatches and exposures to exchange rate fluctuations, raising the risk of balance sheet losses, with repercussions for the banking sector.

To better manage the increased risks in the banking sector, CBvS is strengthening bank supervision and identifying and addressing possible vulnerabilities in bank balance sheets. To this end, CBvS established a Financial Stability Department to assess systemic risks on a regular basis, which published the first Financial Stability Report in October 2015. The 2018 Financial Stability Report is in the final stages of preparation

The CBvS and the Ministry of Finance are also working to establish a bank resolution framework through the establishment of a bank resolution committee and the passage of appropriate legislation in line with international standards. In 2016, a first draft of the Bank Resolution Law was prepared with assistance from the IMF. The working group, consisting of staff from Banking Supervision Department and supported by the legal unit, adapted the text prepared by IMF. In December 2018, the working group submitted a draft of this law for screening to the Legal Department. The Explanatory Notes, which are required to accompany and draft law, have been written and are being reviewed. The CBvS is currently finalizing the draft with the objective of presenting it to the National Assembly before end-2019. The Credit Institutions Recovery and Settlement Act (HAK Act) also known as Banking Resolution Act, enables the Bank to implement preventive, early intervention, and resolution measures against credit institutions established in Suriname to prevent a banking crisis. Furthermore, the law ensures the orderly settlement of failing banks and sets the framework for supervision in the event of an impending banking crisis.

The introduction of the Banking Resolution Act makes it necessary to make some amendments in the Banking and Credit Supervision Act (WTK). A number of adjustments will also be proposed in response to the Annual Accounts Act and the relationship with the external auditors of the institutions. The Deposit Insurance Act will be finalized after passage of the Banking Resolution Act. The law regarding Credit Bureau is currently at the National Assembly for discussion and adoption. The draft Insurance Company Supervision Act is currently at the Ministry of Finance, with the expectation that they will be presented to the National Assembly before the end of 2019.

To strengthen central bank regulation, the CBvS has upgraded the regulatory and macro-prudential framework by introducing new regulations on capital adequacy, asset classification and provisioning, corporate governance, internal audit, foreign exchange risk, liquidity risk, interest rate risk, large exposures, and open foreign currency positions. The CBvS closely monitors banks’ liquidity and the evolution of non-performing loans, and increases their provisioning levels as necessary. In the process, the CBvS is phasing out existing foreign currency swaps with local banks by not rolling them over as they mature. Unwinding swaps with banks will help support financial stability and support the ongoing monetary policy tightening. The value of such swaps as of September 30, 2019 was approximately US$41 million, as compared to approximately US$92 million as of end-December 2018.

Anti-Money Laundering

The three existing main pieces of AML legislation in Suriname are in the process of being merged into one law. Legislation is being brought in line with all of the 2012 FATF recommendations and all adjustments thereof, as required in the Mutual Evaluation Procedures. The CBvS has pledged support to the other supervisors to improve supervisory practices for both financial and non-financial service providers. With support of the U.S. Federal Reserve Bank, the FIBA, and the University of Florida, at least 50 staff members from the CBvS and supervised institutions will be Anti-Money Laundering Certified Associate (AMLCA) certified.

55 All banks have initiated projects for updating their client’s profile, KYC information, transaction monitoring, and banks’ risk profile. In March 2019, information sessions were held for the supervised institutions on compliance, NRA and the 4th MER. The NRA was launched on 15 July 2019 with the support of the Government and stakeholders.

To further strengthen the business environment, the Government has been reviewing the Republic’s AML/CFT framework and addressing remaining deficiencies. In November 2015, the Caribbean Financial Action Task Force issued a public statement on remaining strategic deficiencies in Suriname’s AML/CFT regime. The Government passed the necessary legislation in 2016, following which the CFATF issued a “Public Statement” in May 2017 confirming the removal of Suriname from its internal review process, owing to significant progress in improving its AML/CFT regime and adequately addressing the key AML/CFT deficiencies identified. In 2018, CBvS brought Money Transaction Offices (cambios) under the supervisory umbrella of the CBvS’s Banking Supervision Department as part of its efforts to strengthen its AMF/CFT regime. All commercial banks have implemented an AML/CFT framework and comply with the AML/CFT regulations. If implementation is deemed insufficient, based on the CBvS internal AML/CFT rating system, banks, pension funds, or cambios would need to provide the Bank an action plan including timeframes after every AML/CFT inspection.

The Bank has taken additional steps to enforce compliance in cambios though a modification of their licensing. In mid-2019, all cambios received a new license to operate, under stricter conditions. The licenses which have been granted to the cambios come with strict and binding conditions:

 Beginning September 15, 2019, all daily reports have to be in accordance with all concerning regulations.  Beginning October 1, 2019 all cambios have to file a complete license application for a new term with the Central Bank.  Beginning November 1, 2019 all cambios have to file a Plan of Approach concerning all outstanding items regarding corporate governance, administrative organization/ internal control and compliance, with due dates and deliverables.

Cambios licenses may be suspended for a maximum period of 30 days or their license permanently withdrawn if they do not comply. Two licenses have been temporally suspended. Off-site monitoring has been become more strict and on-site inspections with the cambios are focused on Corporate Governance, AML/CTF, reporting and administrative organization and internal control.

Regulatory Capital Requirements

For the purpose of prudential requirements, banks in Suriname must comply with certain statutory solvency requirements (capital adequacy levels). The capital to risk-weighted assets ratio, or capital adequacy ratio (“CAR”), of the Surinamese banking sector has gradually improved in recent years, mostly as the CBvS has tightened regulations and required an increase in the CAR through retained earnings or issuance of shares.

Since September 2014, banks in Suriname have been required to report on the basis of a new capital adequacy regulation. With the revised CBvS directive, the CBvS expects that the Tier 1 capital of the banking sector will continue to strengthen. In 2014, with the new capital regulation, the revaluation reserve, which was part of Tier 2 capital, is no longer included in the regulatory capital of banks. As a result, Tier 1 capital remained the dominant component, accounting for more than 99% of all regulatory capital. The minimum CAR is set at 10%.

The combined capital adequacy ratio slightly improved to 11.0% in June 2019. The overall CAR is expected to improve in the near-term, as one of the larger banks is expected to issue new shares.

56 Reserve Requirements

The CBvS has contained commercial bank lending by increasing required reserve ratios on domestic currency deposits from 30% to 35% in November 2015, and by introducing a requirement to deposit 5% of deposits at the CBvS as part of the new SNEPS system. The 35% reserve ratio for domestic currency deposits has since been maintained. The CBvS allows banks to deduct loans for private residential construction from basic required reserves, resulting in effective requirement that averaged 24.4% in 2018, as compared to 24.0% in 2017 and 23.3% in 2016. Requirements for deposits denominated in U.S. dollars and euros were 50%.

Prior to July 2019, the required foreign currency reserves of banks were permitted to be held either with the CBvS or in an interest-bearing account in a foreign bank on the corresponding bank’s balance sheet. The latter was different than international norms, as it is usual for required reserves to be placed on the balance sheets of central banks. This anomaly tended to underrepresent the CBvS’s international reserves compared to those of central banks in other countries. Beginning June 2019, banks now must keep part of their reserves with the CBvS, specifically, 100% of the euro required reserves and 50% of the U.S. dollar reserves.

As of September 18, 2019, the required foreign currency reserves amounted to US$571.6 million and €141.5 million, of which US$246.7 million and €92.5 million were held at the CBvS. These amounts include the recent mandatory transfers to the CBvS. From April 1 to September 18, 2019, banks transferred US$175.0 million and €64.5 million to their required reserve accounts at the CBvS. As of September 18, 2019, approximately 46% of the effective required U.S. dollar reserve requirements are under the management of the CBvS. For the euro, the ratio was 87%.

Banking and Financial Institutions

As of December 2018, the financial sector of Suriname consisted of 10 commercial banks, one secondary bank, one development bank, four finance and investment companies, 24 credit unions, 13 insurance companies (four life insurance, seven non-life insurance, two funeral insurance), 40 pension funds, five provident funds, 25 foreign exchange offices, seven money transfer houses and one stock exchange.

The commercial banking industry is highly concentrated, with the three largest banks, De Surinaamsche Bank, Republic Bank Suriname, and Hakrinbank, collectively accounting for approximately 70% of the assets of the banking system, excluding the CBvS. Republic Bank Suriname is a subsidiary of Republic Bank of Trinidad and Tobago, while the other two banks are partially state-owned. Furthermore, there are two fully state-owned banks: Surinaamse Postspaarbank, and Volkscredietbank. The latter one absorbed the smaller state-owned Landbouwbank in early 2016. These banks constitute a very small share of Suriname’s banking market.

The Government owns 51% of Hakrinbank. The Government’s stake in Hakrinbank is a holdover from that bank’s failure in the 1970s, which was the last time a bank failed in Suriname. The Government appoints two of Hakrinbank’s seven board members and generally assumes a passive management role. The Government also owns a 2.3% direct stake in De Surinaamsche Bank.

The state-owned banks are generally less healthy than the private sector banks and suffer from relatively poor asset quality and management. The Government is considering a merger of the two remaining state-owned banks into one and the divestiture of the merged bank.

The CBvS reported that the majority of banks improved their risk profiles in 2014 in terms of nonperforming loans and capital adequacy. The rapid depreciation of the SRD in 2015-2016 increased risks in the banking system, as the ratio of non-performing loans increased slightly during 2015-2016 and the loan dollarization ratio increased from approximately 34-40% during 2014-2015 to approximately 52%. The increase in the dollarization ratio can be explained by the revaluation effect that accompanied the rapid depreciation of 2015-16. As of December 31, 2018, the non-performing loans improved slightly from 13.0% in December 2017 to 12%.

Following the crisis period of 2015 and 2016, the balance sheets of Suriname banks have been improving. The average capital ratio increased from 5.5% of risk-weighted assets as of December 31, 2016 to 9.6% as of

57 December 31, 2018. However, there is wide variability among banks, with some still not meeting minimum regulatory requirements according to their financial statements.

The following table sets forth the analytical accounts of commercial banks and finance companies in Suriname as of the dates presented.

Analytical Accounts of Commercial Banks and Finance Companies As of As of December 31, August 30, 2014 2015 2016 2017 2018* 2019* (SRD millions) Foreign assets (net) 2,164.2 2,618.0 5,309.2 5,853.2 6,438.1 4,352.4 Foreign assets 2,506.8 3,012.2 5,988.6 6,586.9 7,137.2 5,117.5 Foreign liabilities 342.6 394.2 679.3 733.7 699.2 765.1

Claims on the government (net) 739.7 417.7 914.5 1,900.2 1,698.8 2,313.8 Claims on the government (1) 995.2 644.3 1,152.9 2,225.9 2,342.9 3,171.1 of which: in foreign currency 56.9 52.9 476.3 802.0 799.9 1,629.8 Liabilities to government 255.5 226.6 238.4 325.7 644.1 875.3 of which: in foreign currency 4.5 4.0 12.6 23.1 38.0 28.9

Claims on the CBvS (net) 1,104.8 1,301.3 1,948.3 2,116.8 3,319.9 5,313.6 Claims on the CBvS 1,196.9 1,466.8 1,983.2 2,364.7 3,366.4 6,017.9 of which: in foreign currency 100.3 136.4 465.7 485.7 675.2 3,219.4 Liabilities to the CBvS 92.1 165.3 34.9 247.9 46.5 704.3 of which: in foreign currency 51.8 7.6 8.0 96.3 38.2 697.1

Claims on other resident sectors 5,415.5 6,299.0 8,142.2 8,204.3 8,149.5 8.152.5 Claims on other financial corporations 157.0 189.9 241.4 178.2 218.0 117.5 of which: in foreign currency 41.5 52.9 98.2 120.3 142.5 16.5 Claims on non-financial public corporations 105.5 162.3 319.8 357.1 614.2 673.3 of which: in foreign currency 73.1 127.0 273.1 304.0 393.4 372.6 Claims on other resident sectors(2) 5,153.0 5,946.8 7,581.0 7,669.0 7,317.3 7,361.7 of which: in foreign currency 1,941.1 2,267.2 3,940.0 3,915.4 3,330.0 3,004.1

Shares and other equity 945.4 944.3 955.8 1,248.0 1,377.3 1,442.7

Other assets/liabilities (net)(2) (32.1) 160.0 445.4 658.9 675.6 901.6

Liabilities included in broad money 8,510.9 9,533.7 14,913.0 16,167.6 17,553.3 17,788.0 Transferable deposits 3,670.3 3,851.3 5,610.6 6,375.5 7,216.0 7,420.6 Other deposits 4,840.6 5,682.4 9,302.4 9,792.1 10,337.4 10,367.3 ______(1) Treasury notes and coins held by the ODCs are reflected in “Claims on the government.” (2) Includes accrued interest on non-performing loans on other resident sectors. *Preliminary data. Source: CBvS.

58 The following table sets forth the key financial indicators of Suriname’s three largest banks (the “Primary Banks”) as of the dates presented.

Financial Indicators of Primary Banks

As of June As of December 31, 30, 2014 2015 2016 2017 2018 2019 Non-performing loans (gross) / gross loans 6.2 8.4 11.4 15.1 14.1 14.2 Non-performing loans (net) / gross loans 4.5 5.5 6.0 7.3 6.1 6.2 Reserve for loan losses/gross loans 2.3 3.6 6.7 8.2 8.3 8.6 Total loans / total deposits 58.5 61.7 52.4 51.7 43.3 42.9 Risk-weighted assets / on- and off-balance sheet 57.3 58.2 58.8 53.8 48.6 47.1 assets Liquid assets/ short term liabilities (liquidity ratio) 54.0 59.6 57.8 64.8 68.8 78.0 Liquid assets / gross assets 28.6 29.5 29.3 32.6 36.5 42.0 Return on assets 1.7 1.3 -1.2 0.8 -0.2 0.6 Return on equity 20.3 15.4 -20.5 16.4 -3.9 10.5 Credit growth (year to year) 9.1 15.7 34.7 3.6 -10.4 n.a. Capital / risk-weighted assets (Solvency) 11.5 11.2 4.4 7.6 8.0 9.6 Average interest rate debit (SRD) 13.3 12.1 13.1 14.1 13.9 13.1 Average interest rate credit (SRD) 5.7 4.1 4.3 4.5 4.4 4.5 Average interest rate debit (foreign currency) 9.4 9.4 9.4 9.0 8.4 7.9 Average interest rate credit (foreign currency) 1.6 2.5 2.3 2.1 1.7 1.6 ______Source: CBvS

The following table set out the total assets of the banking system and financial entities as of the dates presented.

Total Assets of Banking System

As of December 31, (except where otherwise indicated) Commercial Other Financial Total Banks(1) Institutions (SRD %(2) (SRD %(2) (SRD %(2) millions) millions) millions) 2014 10,541 61.0% 3,299 19.1% 13,840 80.0% 2015 11,822 72.3% 3,830 23.4% 15,652 95.7% 2016 17,808 91.4% 5,912 30.3% 23,720 121.7% 2017 20,049 83.4% 6,168 25.7% 26,217 109.1% 2018 22,074 85.5% 7,073 27.4% 29,147 112.9% ______n/a Information not available for the relevant date. (1) Includes both private and state-owned banks. (2) As a percentage of GDP. Source: CBvS.

Bank conditions reflected the effects of the economic downturn and the tightened regulatory oversight by the CBvS. As a result of the economic downturn, the CARs of two banks fell below 10%, which was largely addressed during and after the economic crisis. In the case of a small state-owned bank, this led to a merger with a larger and well-capitalized state-owned bank. In July 2014, new stricter regulations on capital were issued by the CBvS and the CAR at December 31, 2014 increased to 11.5%. After falling sharply during the crisis to a low of 4.4% at end-2016, the CAR improved under a strict supervision of the CBvS and a return to economic growth. The CAR improved to 8.0% at end-2018 and 9.6% at end-June 2019. Non-performing loans followed a similar pattern. From a low of 6.2%

59 at end-December 2014, NPLs increased during the crisis to a high of 15.1% at end-2017, before falling gradually to 14.2% at end-June 2019. The increased regulatory supervision by CBvS led to higher levels of reserves, with the increase in net NPLs during the crisis being largely attenuated by higher reserves. The reserves for loan losses increased from 2.3% at end-December 2014 to 8.2% at end-December 2017 and then more gradually to 8.6% at end- June 2019.

The following table sets forth information on the loan portfolio of commercial banks and other lending institutions as of the dates presented.

Loan Portfolio As of December 31, Commercial Banks(1) Other Lending Institutions Total (SRD millions) %(2) (SRD millions) %(2) (SRD millions) 2014 5,201.0 88.19% 696 11.81% 5,897.71 2015 6,019.0 89.35% 718 10.65% 6,736.85 2016 17,808 n.a. n.a. n.a. n.a. 2017 20,049 n.a. n.a. n.a. n.a. 2018 22,074 n.a. n.a. n.a. n.a. ______n.a. Information not available for the relevant date. (1) Includes both private and state-owned banks. (2) As a percentage of total loans. Source: CBvS.

Loan growth in the commercial banking system has occurred in all the major sectors of the economy. The most significant loan growth during 2011-July 2019 occurred in the housing construction, wholesale and retail trade and consumer loans, which dominate the asset portfolio of commercial banks. Between December 31, 2011 and July 31, 2019, total loans to the housing construction sector grew by 10,575%, while credit to the trade sector grew by 120%, and other sectors by 270%. The CBvS has required those banks to make additional provisions in line with the Credit classification and Provisioning regulations. Higher capital is required for banks which are rated with a CAMEL 3 and higher. Sectors with the highest NPL ratios are construction and installation (mainly real estate), services (mainly hotels and restaurants and administration and advisory, and forestry.

60 The following table sets forth information on the loans from financial institutions by economic sector as of the dates presented.

Financial System Loans by Sector

Credit in SRD by Commercial Banks and Finance Companies (1)

As of December 31, 2014 2015 2016 2017 2018* (SRD millions) Manufacturing 230.4 276.1 258.6 258.6 258.6 Construction 203.0 244.9 169.3 169.3 169.3 Agriculture 95.6 126.2 121.6 121.6 121.6 - Agriculture 65.2 88.9 90.1 90.1 90.1 - Animal husbandry 30.4 37.3 31.5 31.5 31.5 Mining 47.3 69.3 36.2 36.2 36.2 Fisheries 18.5 20.8 14.7 14.7 14.7 Fisheries 18.5 20.8 14.7 17.5 12.4 Utilities 10.9 4.5 1.2 1.2 0.4 Forestry 0.2 0.5 1.2 1.0 1.6 Housing construction 789.3 879.7 1,017.3 1,009.6 1,028.7 Trade 717.4 865.7 890.5 933.1 897.5 Services 244.4 328.9 352.8 321.6 287.3 Transport, storage, and 83.2 75.0 45.3 27.3 34.3 communication Other ( 2) 1,818.2 1,492.9 1,528.7 2.332.7 2,862.2 of which: credit to 919.2 555.9 639.8 1,389.6 1,512.5 government(2) Total credit 4,258.7 4,384.4 4,437.2 5,214.7 5,755.8

Provisions for non-performing 91.7 162.1 184.3 233.7 224.4 loans

Total credit net of provisions 4,167.0 4,222.2 4,252.9 4,981.0 5,531.4 ______(1) Data includes all commercial banks and two finance companies. (2) This figure differs with respect to claims on government in the analytical accounts of the banks because it does not include prepaid taxes or Treasury notes and coins held by banks. * Preliminary data. Source: CBvS.

61 The following table set out information on foreign currency loans from financial institutions by economic sector as of the dates presented, presented in SRD.

Credit in Foreign Currency by Commercial Banks and Finance Companies (1)

As of December 31, 2014 2015 2016 2017* 2018* (Equivalent in SRD millions) Manufacturing 176.0 207.4 388.3 303.7 431.8 Construction 43.4 57.4 154.8 114.7 88.3 Agriculture 13.7 26.2 28.9 39.5 45.2 - Agriculture 11.5 23.1 28.3 36.9 40.7 - Animal husbandry 2.2 3.1 0.7 2.6 4.5 Mining 144.4 190.6 285.5 391.2 458.8 Fisheries 33.9 33.5 56.1 62.4 65.2 Utilities 31.9 54.0 78.6 70.0 52.4 Forestry 2.3 2.4 15.0 72.6 9.6 Housing construction 101.5 151.8 368.4 371.4 300.2 Trade 806.0 949.2 1.533.0 1,409.2 929.7 Services 220.1 265.5 778.9 823.6 718.7 Transport, storage, and communication 70.0 68.8 92.6 95.1 80.6 Other(1) 469.0 493.1 994.8 1,387.5 1,483.6 of which: credit to government 56.9 52.9 476.3 802.0 799.9

Total credit 2,112.2 2,500.0 4.775.1 5.141.0 4,664.2

Provisions for non-performing loans 34.9 59.2 205.1 377.5 402.1

Total credit net of provisions 2,077.3 2,440.7 4,569.9 4,763.6 4,262.1 ______(1) Data includes all commercial banks, and two finance companies. (2) This figure differs with respect to claims on government in the analytical accounts of the banks because it does not include prepaid taxes or Treasury notes and coins held by banks. * Preliminary data. Source: CBvS.

62 The following table set out information on deposits as of the dates presented, presented in SRD.

Deposits As of August As of December 31, 31, 2014 2015 2016 2017 2018 2019 Transferable deposits 3,670.3 3,851.3 5,610.6 6,375.5 7,216.0 7,420.6 Non-bank financial institutions 185.6 262.2 278.7 354.4 532.8 615.7 of which: in foreign currency 82.9 118.9 191.8 225.7 362.1 420.2 Non-financial public enterprises 194.3 271.7 364.7 422.7 542.5 644.1 of which: in foreign currency 100.8 107.9 218.6 202.7 251.4 291.0 Other non-financial enterprises 2,114.5 2,066.4 3,288.0 3,523.1 4,088.3 3,982.1 of which: in foreign currency 1,133.4 1,082.3 2,201.5 2,326.3 2,515.4 2,397.7 Other resident sectors 1,175.9 1,251.0 1,679.2 2,075.2 2,052.3 2,178.8 of which: in foreign currency 510.0 588.8 931.3 1,213.9 1,088.9 1,061.3

Savings deposits 2,972.1 3,251.7 4,850.1 5,125.4 5,463.1 5,466.6 Non-bank financial institutions 152.5 150.0 183.4 198.1 254.3 285.4 of which: in foreign currency 33.9 37.4 71.0 84.0 141.6 133.5 Non-financial public enterprises 33.8 57.6 88.5 56.1 157.8 192.3 of which: in foreign currency 13.3 14.2 31.2 20.7 44.9 25.0 Other non-financial enterprises 353.9 332.5 495.5 458.8 502.2 494.3 of which: in foreign currency 178.3 196.3 402.3 370.2 392.3 382.2 Other resident sectors 2,431.8 2,711.6 4,082.8 4,412.4 4,548.9 4,494.6 of which: in foreign currency 1,421.4 1,734.6 2,977.4 3,231.4 3,228.1 3,049.3

Time deposits ≤ 1 year 891.8 971.6 1,708.1 1,758.4 2,058.9 2,534.1 Non-bank financial institutions 223.3 253.0 416.1 444.1 520.4 615.9 of which: in foreign currency 53.3 90.8 213.5 197.6 173.7 161.8 Non-financial public enterprises 37.1 25.0 65.9 59.8 53.7 86.4 of which: in foreign currency 9.4 8.5 0.3 0.3 1.2 0.6 Other non-financial enterprises 212.0 237.3 436.6 408.3 553.4 781.1 of which: in foreign currency 141.0 166.4 326.0 360.1 472.0 642.5 Other resident sectors 419.5 456.2 789.4 846.2 931.4 1,050.8 of which: in foreign currency 248.6 289.7 552.5 606.2 646.4 695.5

Time deposits > 1 year 976.7 1,459.1 2,744.2 2,908.3 2,815.2 2,366.6 Non-bank financial institutions 254.3 372.2 750.1 762.4 723.2 709.4 of which: in foreign currency 151.2 249.3 622.3 547.3 478.7 416.1 Non-financial public enterprises 6.0 15.5 21.1 4.5 10.3 9.7 of which: in foreign currency 1.0 1.2 2.2 - - 0.4 Other non-financial enterprises 211.3 410.0 774.9 858.0 768.6 567.6 of which: in foreign currency 162.4 361.5 739.7 793.1 690.2 516.9 Other resident sectors 505.2 661.4 1,198.1 1,283.5 1,313.1 1,079.8 of which: in foreign currency 295.8 442.9 988.9 1,002.6 978.1 768.4

Total deposits 8,510.9 9,533.7 14,913.0 16,167.6 17,553.3 17,788.0

______Source: CBvS.

Total deposits have grown continuously since 2014. As can be expected in a financial system, longer-term deposits (term deposits with a maturity exceeding one year) and savings grew disproportionately faster than transaction-based shorter-term deposits (demand deposits and term deposits with a maturity less than one year). The financial crisis reversed with trend temporarily, with foreign currency deposits increasing relatively due to the

63 valuation effect. The usual pattern of relative increases in longer-term deposits set in again with the end of the crisis in 2017.

Deposit dollarization ratios have largely remained above 50% since 2000, despite the CBvS policy of creating reserve requirement-based incentives to slowly de-dollarize the banking system. Wide-spread transaction and valuation dollarization of certain economic sectors such as real estate and vehicle sales has underpinned the dollarization of the economy, leading to an only slow decline in the loan and deposit dollarization ratios. The share of foreign currency deposits in total deposits has stayed in the range of approximately 50-55% since 2012, declining as devaluation expectations subsided and increasing as devaluation expectations increased. The devaluation and depreciation episodes during 2016-2017 increased the deposit dollarization ratio to approximately 70%, as a result of the relative change in value of the SRD to foreign currencies, but also reflecting a speculative hoarding of foreign exchange in early 2016 as depreciation expectations increased. The deposit dollarization ratio stabilized at approximately 70% during May 2016 until about April 2018, reflecting a return to a more stable exchange rate environment and the abatement of depreciation expectations. Since May 2018, the deposit dollarization ratio has decreased from approximately 70% to approximately 62% in July 2019. The fall in the deposit dollarization is a clear indication of increased confidence in the local currency and reveals the preferences of residents in favor of holding local currency, despite pre-election jitters and the impact of the €19.5 million seizure by Dutch authorities. Similarly, loan dollarization ratios have decreased since December 2017 from approximately 54% of all loans to approximately 42% at the end of September 2019.

The following table shows dollarization ratios in percent of total deposits or credit in the banking system as of the dates presented.

As of As of December 31, August 31, 2014 2015 2016 2017 2018 2019* (%) Deposits 53.3 57.6 70.2 69.2 65.3 61.6 Credits 38.1 39.0 53.1 53.1 47.7 41.8 ______* Preliminary data. Source: CBvS.

National Electronic Payment System

In August 2015, the CBvS, in consultation with all commercial banks and relevant stakeholders, began a strategic project to modernize the payment system of Suriname, with the objective of bringing it into line with international best practices.

The Suriname National Electronic Payment System (“SNEPS”) is an Automated Transfer System (“ATS”), which consists of the following main components: the Automated Clearing House (“ACH”), the Real Time Gross Settlement (“RTGS”) and the Central Securities Depository (“CSD”). The ATS is owned and managed by the CBvS. While the RTGS component of the ATS enables clearing and settlement of large value payments, the ACH component of the ATS enables clearing and settlement of bulk low-value payment transfers.

The ATS provides ultimate settlement of all inter-bank transfers in CBvS funds, using pre-funded settlement accounts. This contributes to the elimination of systemic settlement risk, the promotion of sound liquidity and credit risk management and simpler operations for all banks. The ATS also enables direct settlement of net positions. Connected to the ATS is a Central Securities Depository (“CSD”), for government securities, including registration and settlement facilities, which is intended to enable the growth of domestic capital markets. This connection provides an important platform for effecting final settlement of securities transactions, in conformity with the principles of Delivery versus Payment (“DvP”), and for supporting the provision by the CBvS of intraday liquidity to direct participants in the payments system.

64 Money Supply

The CBvS publishes on its website detailed monthly statistics on monetary aggregates, including the money supply and monetary base. The data is fully consistent with the IMF’s global data standards, as Suriname adheres to the IMF’s Enhanced General Data Dissemination Standard (e-GDDS). The most important components of the money supply are M1 and M2, which are comprised of:

 M1: paper money and coins held by the public plus transferable deposits in local and foreign currency; and

 M2: M1 plus other deposits, including savings and time deposits, and debt securities in local and foreign currency.

Broad Money

As of December 31, 2014 2015 2016 2017 2018* (SRD millions) Broad Money M2(1) 9,520.2 10,639.3 16,193.0 17,601.5 19,196.2 Other deposits (2) 4,852.1 5,694.0 9,314.6 9,804.3 10,353.6 of which: in foreign currency 2,709.6 3,593.5 6,928.6 7,213.5 7,248.8 Securities other than shares 17.7 18.9 28.4 42.7 41.6 M1(3) 4,650.4 4,926.4 6,840.1 7,754.5 8,801.0 Currency outside banks 921.3 972.6 1,204.5 1,304.6 1,516.6 - Issued by the CBvS 901.2 952.0 1,185.0 1,289.5 1,504.6 - Issued by the Government 20.0 20.6 19.5 15.1 12.0 Transferable deposits 3,729.1 3,953.8 5,635.6 6,449.9 7,284.4 of which: in foreign currency 1,827.1 1,977.1 3,543.2 3,968.7 4,217.9 ______(1) Includes treasury notes and coins in addition to the broad money liabilities of depository corporations. (2) Includes domestic and foreign currency time and savings deposits. (3) Includes domestic and foreign currency deposits. *Preliminary data. Source: CBvS.

In 2014, domestic liquidity creation was dampened through a decline in net foreign assets and a slower increase in credit extension by banks to the private sector. The policy of the CBvS to contain liquidity growth beginning in 2015 severely constrained M2 growth. Nominal growth in M2 during 2015 was only 11.8%, which was below the 2015 rate of inflation. M2 increased by 52.2% in 2016 due to a nominal increase in the SRD-counter value of foreign currency deposits. In real terms, this reduced M2 in relation to GDP, a necessary corollary in the efforts to restrict liquidity availability during the stabilization phase of the economic reform program. As the economy returned to a growth phase, M2 increased during 2017-July 2019 by 11% to recover the required money balances of an expanding economy.

The monetary base (reserve money) declined in the first half of 2015 due to unsterilized foreign exchange market intervention, meaning that the CBvS purchased local currency against foreign currency without injecting the local currency into the market afterward. The contraction peaked at negative 22% (year on year) in July 2015. This contraction was partly reversed in the second half of 2015, after the CBvS provided monetary financing for Government operations based on the issuance of a 30-year loan of SRD 2.5 billion (15% of GDP) in September 2015, of which about SRD 1 billion represented new financing, which the Government used to clear a backlog of domestic invoices and accelerate the payment of invoices in anticipation of the introduction of an automated government payment system. The monetary financing together with about SRD 110 million in net lending to commercial banks contributed to an increase in reserve money by 17.0% by December 31, 2015 as compared to December 31, 2014. The monetary base increased significantly by 50.7% in July 31, 2019 compared to December 31, 2018, which was due to transfers of the foreign currency required reserves of the banks to the CBvS. However, the growth of monetary base in SRD slowed down significantly in the recent months to 5.1% in July 2019. This is due to the active monetary policy of the CBvS to sterilize the liquidity in SRD.

65 During 2016, when the Government drew on its deposits at the CBvS to finance the budget deficit, reserve money expanded by 18.6%. The CBvS and the Government agreed on a temporary nominal freeze on further CBvS financing to the Government in light of the severe ongoing economic crisis. As the real value of the nominally constant credit to the government was eroded by the high depreciation of 2016, credit to the government declined by more than 10% of GDP in the following three years. With the successful stabilization of the exchange rate and a decline in inflation to levels near those of trading partners and a rebounding economy, the CBvS and the Government agreed to discontinue the freeze on new credit to the Government in early-2019 and return to the legal norm of limiting the stock of credit to the government to 10% of the budgeted central government revenue. The increase in credit to the Government in 2019 had no noticeable effect on the continued declining trend in inflation, the stability of the exchange rate or the growth of private sector credit and international reserves.

Foreign Exchange

The SRD was de facto pegged to the U.S. dollar until March 2016. The SRD was devalued and the exchange rate regime was modified on January 27, 2011. On that date, the CBvS devalued the SRD’s rate from SRD 2.87 per US$1.00 to SRD 3.35 per US$1.00, and its buying rate SRD 2.81 per US$1.00 to SRD 3.25 per US$1.00. At the same time, the CBvS eliminated all but one of the remaining multiple currency practices. The only multiple currency practice which the CBvS retained, as defined by the IMF, was the spread between the official buying and selling rates, which at 3.1% exceeded the 2% spread that the IMF considered the permissible limit for an exchange regime without multiple currency practices.

After the devaluation of January 2011, the SRD remained broadly stable at SRD 3.35 per U.S. dollar and in line with market fundamentals. The parallel market spread that existed from 2008 to 2010 disappeared with the devaluation of the SRD and the parallel market rate remained within the official exchange rate band set by the CBvS. Increased external liquidity, confidence in the public sector and exchange rate management, and stability-oriented and moderate fiscal and monetary policies supported exchange rate stability until 2014.

With the decline in commodity export revenue, exchange rate pressures re-emerged. In response to the decline in international reserves, the CBvS devalued the SRD by 21% in November 2015 and widened the band between buying and selling rates in anticipation of a change to a flexible exchange rate. Exchange rate pressure persisted after the devaluation. A temporary narrowing in the spread was achieved by intervening in the unofficial market in January-February 2016. In March 2016, the CBvS completed its change to a flexible exchange rate regime. In the following months, the exchange rate depreciated significantly, reflecting the commodity prices shock affecting the country. The exchange rate depreciated from SRD 3.35 per U.S. dollar in October 2015 to SRD 7.20 per U.S. dollar as at August 31, 2016, a depreciation that was comparable to that of most commodity exporters in the region in the aftermath of the commodity price declines since 2013. With a free float, the parallel market disappeared by June 2016 and, due to the stabilization of the economy in late-2016, the exchange rate in the free market stabilized The CBvS has allowed the official exchange rate to respond to changing market conditions since then and the exchange rate depreciated gradually to approximately SRD 7.52 per U.S. dollar in mid-2019.

To complete the transition to a flexible exchange rate, the CBvS authorized commercial banks and foreign exchange bureaus to freely determine exchange rates in May 2016. Bid and ask exchange rates are now determined by banks and foreign exchange bureaus directly with their customers and the daily indicative official exchange rate is set equal to a weighted average of these transactions. This step has allowed banks to compete more effectively in the foreign exchange market and should increase the volume of foreign currency transactions handled by them. The move led to the elimination of the spread between the indicative exchange rate posted daily by the CBvS and the parallel market rate, which is a crucial indicator of the liberalization of the exchange rate market and the achievement of a free float.

In April 2018, customs authorities in The Netherlands seized a Euro banknote shipment from Suriname with a value of €19.5 million at the Schiphol airport in Amsterdam. The banknotes were being transported by the CBvS on behalf of three Surinamese commercial banks pursuant to a banknotes trade agreement between the CBvS and the Bank of China. Since 2013, regular transports of Euro banknotes from commercial banks in Suriname have been taking place in this way. According to the report of the seizure, the seizure took place on suspicion of money laundering, based on a number of indicators. According to the relevant Surinamese banks, the banknotes trade agreement between the CBvS and the Bank of China meets the need of Surinamese banks to export surplus Euro notes

66 and obtain U.S. dollars required for foreign trade, which became increasingly difficult due to de-risking at their traditional correspondent banks. Negotiations between the CBvS and the Dutch Public Prosecution Service to end the seizure have taken place for more than a year but a final resolution has not been reached. On November 5, 2019, a Dutch court held that approximately two-thirds of the relevant money shipment should be returned to its owners and, with regard to the remaining funds, asked the parties to reach a settlement, which the Surinamese banks have declined to do. A Dutch court is scheduled to issue a decision on December 24, 2019 at the request of the relevant Surinamese banks for lifting the seizure. In the meantime, the Dutch prosecution has formally designated the three commercial banks involved in the mission, as well as five cambios in Suriname, as suspects of money laundering.

The seizure led to a gradual destabilization of the Surinamese foreign exchange market. The foreign exchange market is relatively small compared to the large volume of exports and imports, pointing to a relatively segmented and thin market. Exports and imports of goods and services amounted to approximately US$4.44 billion in 2018, while the entire volume of the cash and electronic foreign exchange market in Suriname only amounted to US$325 million and €455 million in 2018. The cash element of the foreign exchange system in Suriname is relatively large due to the large inflow of Euro cash remittances from visitors and the large U.S. dollar outflows by Surinamese travelling abroad. This market was severely disrupted as the CBvS and local banks became unable to export Euro cash or import US dollar cash. As a result, parallel markets for Euro and US dollar cash re-emerged, with the Surinamese dollar appreciating relatively against the Euro and depreciating relatively against the U.S. dollar. The difference between the global market and the domestic cross rate between U.S. dollar and Euro has stayed at a level of approximately 10% during most of 2019. Since July 2019, the U.S. Federal Reserve Bank has shipped U.S. dollars to Suriname, as agreed with the CBvS, partially easing the problem created by the seizure by the Dutch authorities. The forthcoming elections in May 2020 have also impacted the level of confidence in the Surinamese dollar, further pressuring the SRD/USD exchange rate. There has been a long tradition of exchange rate devaluations after elections and this has cast doubt on the stability of the current indicative exchange rate. While it will technically not be possible for the SRD to be devalued after the election because there is no longer a fixed exchange rate regime and the exchange rate is now freely determined and publicly posted at banks and cambios, this has not prevented concerns by Suriname residents about potential exchange rate changes, some of whom have hoarded U.S. dollars, thereby pressuring the exchange rate.

The following table sets forth the high, low, average and period end SRD to U.S. dollar exchange rates for the periods indicated below.

Exchange Rates

High Low Average Period End (SRD per U.S. dollar) 2014 3.35 3.35 3.35 3.35 2015 4.04 3.35 3.43 4.04 2016 7.88 4.04 6.32 7.49 2017 7.62 7.48 7.55 7.52 2018 7.53 7.52 7.52 7.52 2019 (through November 30) 7.52 7.52 7.52 7.52 ______Source: CBvS.

67 International Reserves

Reflecting the decrease in net exports and intervention by the CBvS to support the SRD, gross international reserves declined from more than US$1 billion as of December 31, 2012 to US$381.1 million as of December 31, 2016. Reserves grew slightly in 2017 to US$424.4 million primarily due to the improvement in the current account balance.

The decline in international reserves during the economic crisis period of 2015 and 2016 peaked in 2015 with a decrease of US$266 million. As a result of the issuance of the Republic’s international bond in 2016, reserves increased by US$79 million in 2016, covering 2.7 months of imports of goods and services as of the end of 2016. In 2017, reflecting a gradual rebound from the economic crisis period of 2015 and 2016, reserves increased by US$22 million, with a similar import coverage ratio at the end of 2017 as at the end of 2016. With the end of the economic crisis and economic rebound in 2018, reserves increased by US$148 million in 2018. As a result of the strong increase in imports in 2018, the import coverage ratio increased only to 3.3 months of imports.

The sharp increase in the official reserve assets as of December 31, 2018 reflects both the repayment by Staatsolie of its US$261.5 million loan from the Government and a payment by Staatsolie to the Government for the acquisition by Staatsolie of the Government’s shares in Newmont Goldcorp Suriname, both in May 2018. This increase was offset in part by settlement of and reservations for Government debt service payment obligations.

The CBvS maintained a slow pace of reserve accumulation during 2017-2018 in order to facilitate economic growth and trade and further stabilize the exchange rate. The aim of the CBvS was to maintain reserves at a level of 3 months of imports. This was achieved in 2017 and maintained in 2018, notwithstanding a sharp increase in imports during 2018. With the restoration of economic growth and a stable exchange rate, the CBvS began to accumulate reserves more aggressively in 2019. The CBvS practice of maintaining foreign currency swaps with local commercial banks is being gradually discontinued during 2019. The swaps amounted to US$91.8 million at end-December 2018 and have since declined to US$48.6 million at end-September 2019. The CBvS began to buy artisanal gold against SRD’s in mid-2019, while using monetary policy instruments to sterilize the increase in local currency created by the transaction. Purchases of artisanal gold against SRD’s increased from SRD 128.9 million in 2018 to SRD 163.5 million during January-September 2019. The CBvS also agreed with commercial banks to gradually transfer commercial banks’ required foreign currency reserves onto the balance sheet of the CBvS, a common practice around the world, but new to Suriname. The stock of commercial banks’ required foreign currency reserves held on the CBvS balance sheet increased from US$79.9 million at end-December 2018 to US$360.5 million at end-September 2019. As a result, international reserves increased significantly during 2019 from US$580.7 million at end-December 2018 to US$714.6 million at end-September 2019. The corresponding import coverage ratio increased from 3.3 months of imports at end-December 2018 to 3.6 months of imports at end-September 2019. Excluding imports from mining companies, which are financed entirely by mining companies’ own foreign exchange holdings or proceeds and for which CBvS should not require to hold reserves, the import coverage ratio increased from 4.8 months of imports at end-December 2018 to 5.2 months of imports at end-September 2019.

In 2019, the CBvS modified its reserve accumulation policy. Previously the CBvS only accumulated reserves passively by retaining the foreign exchange component of foreign-currency royalties, tax, and dividend payments by mining companies. The purpose was to help solidify confidence in the local currency after the sharp depreciation event in 2016. The stability of the exchange rate since late-2016 can in part be attributed by the hands-off policy by the CBvS. In 2019, the CBvS began to increase purchases of gold with local currency, compared to purchases using U.S. dollars previously. Part of the additional foreign currency inflows were sold back into the market with the purpose of increasing the depth of the foreign exchange market in Suriname. Before 2019, small gold exporters did not sell their foreign exchange proceeds into the local market unless necessary to cover local currency expenses, but instead invested them in foreign currency financial assets. This had rendered the foreign currency market unusually thin in Suriname, prompting banks to curtail monthly foreign currency withdrawals. The new policy of the CBvS introduced in 2019 deepened the foreign currency market, and bank limitations on foreign currency withdrawals disappeared during 2019, while international reserves increased. At the same time, the CBvS agreed with commercial banks to transfer part of their required foreign currency reserve deposits into the CBvS, while setting up a joint investment committee to manage foreign assets. The combination of these policies has led to a faster pace of international reserves accumulation during 2019 than in 2018. International reserves increased to US$720 million or 4.0 months of imports as of September 30, 2019.

68 The following table sets forth information on Suriname’s international reserves and foreign currency position as of the dates indicated.

Official Reserve Assets and Other Foreign Currency Assets As of December 31, As of August 31, 2014* 2015* 2016* 2017* 2018* 2019* (US$ millions) I. Central Bank of Suriname 1. Net foreign assets (A-B) 1,672.4 378.7 1,139.5 511.3 1,988.1 2,731.0 A. Foreign assets 2,100.9 1,415.0 3,479.6 3,163.1 4,552.0 5,190.4 1. Reserve assets 2,031.5 1,307.9 2,801.1 3,138.6 4,295.9 5,169.3 Monetary gold 168.5 180.5 213.8 288.3 418.9 481.1 SDR holdings 382.5 248.6 273.6 280.4 258.1 239.9 Foreign exchange 29.6 32.1 38.2 36.1 103.0 238.1 Deposits (1) 547.0 760.1 2,111.6 1,920.4 2,157.0 2,553.2 Securities 875.0 86.6 73.2 516.7 1,264.3 1,563.8 Reserve position in the IMF 28.8 0.0 90.7 96.7 94.6 93.2 2. Other foreign assets (2) 69.3 107.1 678.5 24.4 256.1 21.1 B. Foreign liabilities 428.5 1,036.3 2,340.1 2,651.7 2,563.9 2,459.4 1. Reserve-related 7.0 7.5 13.0 13.7 14.3 4.4 2. Other 421.5 1,028.8 2,327.1 2,638.1 2,549.7 2,454.9 2. Net position in foreign currency with residents (160.3) (485.4)(1,638.0) (991.5)(1,255.3) (2,531.9) Assets 52.2 7.0 9.2 89.3 156.1 816.6 Liabilities 212.4 492.3 1,647.2 1,080.9 1,411.5 3,348.5

II. Other depository corporations 1. Net foreign assets 2,164.2 2,618.0 5,309.2 5,853.2 6,438.1 4,352.4 Foreign assets 2,506.8 3,012.2 5,988.6 6,586.9 7,137.2 5,117.5 of which: short term (3) 2,371.1 2,809.3 5,302.2 5,718.3 5,722.7 3,773.0 Foreign liabilities 342.6 394.2 679.3 733.7 699.2 765.1 of which: short term 308.8 333.5 566.1 586.5 557.4 629.0 2. Net position in foreign currency with residents (2,437.0)(2,960.0)(5,775.1)(6,297.3)(6,834.9) (4,192.2) Assets 2,397.4 2,933.2 5,771.3 6,151.3 6,121.9 8,769.5 Liabilities 4,834.4 5,893.1 11,546.4 12,448.7 12,956.7 12,961.7

III. Foreign currency position 1,298.8 154.5 -3.3 265.1 1,478.3 1,523.0 Central Bank of Suriname(4) 1,517.6 438.0 389.8 622.9 1,779.7 1,246.1 Other depository corporations (4) (218.8) (283.5) (393.1) (357.7) (301.4) 276.9

Memorandum items International Reserves (I.A.1-I.B.1) (in SRD) 2,031.5 1,307.9 2,801.1 3,138.6 4,295.9 5,169.3 International Reserves (in US$)(5) 625.1 330.2 381.1 424.4 580.7 698.7 ______* Preliminary data. (1) Data from 2016 also includes foreign currency deposits held on behalf of the government. (2) Data prior to 2015 includes primarily holdings of foreign currency deposits on behalf of the government. From 2016, these foreign currency deposits on behalf of the government are part of the reserve assets. Data from 2016 includes reservations for government debt liabilities, while data of 2018 also includes reservations for CBvS debt liabilities in 2019. (3) Short term foreign assets include foreign currency holdings and deposits. (4) Excludes deposits of nonresidents in SRD, which are included in “Other foreign liabilities”. (5) Does not correspond to the SRD amount using the CBvS buying rate, due to differences in non-US dollar exchange rate. Source: CBvS.

69 Capital Markets

Suriname does not have a significant capital market.

The capital market in Suriname is mainly represented by the Suriname Stock Exchange, established as a private sector entity in 1994. The Suriname Stock Exchange has very low trading volumes and market capitalization. As of October 2019, the stocks of 12 companies were listed on the Suriname Stock Exchange, and as of December 2018 the market capitalization of the Suriname Stock Exchange was equivalent to 6% of GDP.

The money market in Suriname is mainly based on T-bills, which are regularly issued by the Government to address its operational financial needs. These securities are mostly held in portfolio by banks, insurance companies, state-owned companies, or pension funds. There is currently no secondary market for T-bills.

The Capital Market Act became effective in May 2014. The purpose of this law is the regulation and supervision of the capital market, facilitation of the adequate functioning of the securities market and protection of investors. The supervision of the capital market is under the authority of the CBvS.

70 PUBLIC SECTOR FINANCES

Fiscal Accounts

The following table sets forth the fiscal accounts of the Government for the periods indicated. Data presentation is in accordance with international definitions and the methodology as stipulated in the IMF’s Government Finance Statistics Manual (“GFSM”) 1986 and certain elements of GFSM 2001.

Government Operations(1) Six months ended Year ended December 31, June 30, 2014 2019 2016 2017(1) 2018(1) 2018(1) 2019(1) (SRD millions) Revenue 4,215.1 3,649.7 3,519.1 5,114.4 5,970.0 2,418.9 2,952.1 Tax revenue 2,859.0 2,720.0 2,586.3 3,544.4 4,142.4 1,715.1 2,217.1 Direct taxes 1,449.9 1,124.8 1,226.3 2,002.3 2,190.0 791.8 1,140.2 Indirect taxes 1,409.1 1,595.2 1,360.0 1,542.1 1,952.4 923.3 1,076.9 Non tax revenue 1,356.1 929.7 932.8 1,570.0 1,827.6 703.8 735.0 Grants 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Expenditure (GFS basis) 5,028.6 5,104.7 5,611.9 7,134.7 7,933.9 3,660.2 4,099.8 Arrears payments 0.0 149.3 105.1 219.5 992.9 546.5 297.7 Expenditure (cash 3,113.7 basis) 5,028.6 5,254.0 5,717.0 7,354.2 8,926.8 4,397.5 Wages and salaries 1,373.3 1,532.8 1,602.2 1,922.5 2,414.4 983.0 1,459.8 Goods and services 604.6 1,272.8 1,092.7 1,119.0 870.8 280.4 402.8 Subsidies(2) 2,004.9 1,768.7 1,769.9 2,403.7 3,500.7 1,648.0 1,609.1 Interest 152.8 248.7 515.8 671.5 920.4 437.0 442.5 Capital expenditure 893.0 431.0 736.4 1,237.5 1,220.5 311.8 582.6 Statistical discrepancy 650.3 146.1 (10.9) 87.2 64.4 47.6 23.0 Fiscal balance (1,463.8) (1,601.1) (2,081.9) (2,107.5) (2,028.3) (647.2) (1,147.7)

Financing 1,463.8 1,601.1 2,081.9 2,107.5 2,028.3 647.2 1, 147.7 Equity acquisition 0.0 0.0 (474.3) (70.9) 562.9 562.9 378.0 External (net) 258.3 267.9 4,713.1 983.4 327.1 (98.5 308.3 - Disbursements 364.1 387.9 5,887.3 1,381.8 1,380.7 618.4 570.4 - Amortization 111.0 120.0 1,174.2 398.3 1,053.6 716.9 262.0 Domestic (net) 1,739.6 1,247.4 (45.0) 1,315.6 (798.6) 729.3 835.4 CBvS (3) 175.2 1,713.5 (401.6) 524.3 (151.6) (1,538.6) 577.8 - Claims on government (435.9) 1,865.8 (69.7) (78.1 (7.2) (7.1) 670.2 - Liabilities to government (611.1) 152.3 331.9 (602.4) 144.4 1,531.5 92.5 Other depository corporations(3) 590.8 (327.7) 405.3 860.3 49.6 165.8 497.8 Other financial corporations 0.0 10.9 28.8 (21.1) (1.7) 1.2 14.2 Nonfinancial corporations 0.0 85.8 (2,084.4 50.9 2,234.7 2,100.9 (254.4) Others and arrears 471.7 (149.3) (105.1) (219.5) (992.8) (546.5) (297.7) ______(1) Preliminary data. (2) “Subsidies” include any payments by the Government to companies or individuals. In Suriname, most such payments consist of transfers to individuals, including health, education, and disability payments. Electricity subsidies are partly off-budget and are reflected in the fiscal accounts as under-recorded revenue or expenditure on goods and services. Electricity subsidies have been recorded as both revenue and expenditure items beginning in 2017. (3) Data from the balance sheets of the CBvS and other depository corporations. Sources: CBvS, Ministry of Finance and Suriname Debt Management Office.

71 Budget Process

The budget process begins at the Ministry of Finance, which prepares a Medium-Tern Fiscal Framework (“MTFF”) that is presented to the cabinet for review and advice. After the Council of Ministers approves the MTFF, the Budget Department of the Ministry of Finance sends a budget call to all the line ministries with the expenditure ceilings. When the budget is finalized with the input of all the line ministries, it is presented to the State Board (an intermediate entity that reviews laws and the budget before it is presented to the National Assembly) for review and advice. The President of the Republic then submits the budget to the National Assembly, which typically votes either for or against it along party lines. The approved budgets must include approval for the necessary capital expenditure for each project described in the budget, even if such a project is not to be completed during the budget year. As a result, approved budgets as passed by the National Assembly typically overstate capital expenditure significantly for a given year and are therefore unreliable indicators for the purposes of analyzing or gauging the intended fiscal position of the Government. Typically, the Government spends roughly half of the funds allocated to capital expenditure in a given budget year. See “ – Fiscal Policy and Reforms” below regarding the planned Public Financial Management law, which is intended to improve the existing budget process and strengthen budget discipline.

The National Assembly must approve the Government’s annual budget for the next calendar year before year-end. If it fails to do so, the budget from the previous year remains in effect until a new budget is approved. This last occurred in 2011.

During the course of the fiscal year, the Ministry of Finance issues warrants to the other ministries allowing for a specific limit of expenditure in the course of the following month. The warrant system allows the Ministry of Finance to manage the amount of overall government expenditure to ensure its consistency with overall economic stability, and to adjust to unexpected revenue or expenditure pressures in order to safeguard the achievement of its fiscal targets.

Fiscal Policy and Reforms

The Government maintains a long-standing policy of adjusting expenditure in cases of declining revenue during cyclical downturns. This tradition of adjusting budget execution to revenue fluctuations has moderated the impact of cyclical fiscal revenue downturns on the fiscal balance over several decades.

In August 2015, as part of the introduction of its economic reform program, the Government began to implement far-reaching expenditure and revenue measures to limit the budget deficit. Revenue and expenditure measures aimed at reducing the budget deficit included a hiring freeze, a first attempt at reducing electricity subsidies, tight fiscal controls over expenditure commitments, a phased but front-loaded repayment of accumulated arrears, increases in gasoline and diesel taxes, increases in the sales tax and the elimination of tax exemptions provided to Surinamese-owned insurance companies.

Further tax measures were implemented in 2019 when the vehicle tax was implemented. This tax is levied on each vehicle in Suriname and varies depending on the category of the vehicle. The measure is expected to add 0.3% of GDP to total fiscal revenue in 2019.

The Government has begun to implement broad structural reforms to eliminate Suriname’s dependence on revenue from oil and mineral ore, to smooth revenue volatility, to streamline procurement and to improve fiscal management. The following is a discussion of certain key structural reforms currently being implemented by the Government.

Tax Reforms

The Government is in the process of implementing a comprehensive set of tax reforms, which it expects will be introduced gradually between 2019 and 2022. These tax reforms include the following:

 Introduction of VAT. VAT had been planned to be introduced in 2018 but this was postponed for operational reasons, as more time was needed for tax authorities to develop the capabilities to introduce it efficiently. VAT

72 will replace the sales tax and other minor indirect taxes with an expected introduction date in 2021 and a full-year effect in 2022. The introduction of VAT is expected to help Suriname increase its reliance on indirect taxes, which is expected to help stabilize fiscal revenue further and reduce the impact of future commodity price shocks. It is intended to generate gross revenue at an annual rate of 2.5% of GDP, which will counter the contemplated reduction in income taxes. The related direct tax reform will reduce the net impact of the VAT reform by approximately 0.5% of GDP. The IDB and the IMF are actively supporting the Government’s efforts in this area. An IT platform has been put in place that is also being implemented as the electronic and automated platform for other forms of tax payments, such as direct taxes. VAT legislation has been prepared and is planned to be submitted to the National Assembly in 2020.

 Income tax reform. VAT implementation will be accompanied by a gradual income tax reform that will reduce the complexity of the system and increase compliance. It is intended to be revenue-negative to reduce its impact on income-generating activities. The tax reform and corresponding administrative reforms in the revenue administration are being carried out with support from the IDB and IMF.

 Modernization of customs administration. A significant portion of revenue is collected on goods entering the country, not only as import duties or statistical or consent fees, but also as a local sales tax. Significant progress on the reform of such duties, fees and taxes has occurred with the modernization of the IT system and the purchase of container scanners. The modernization of the related physical infrastructure is ongoing and scheduled for completion in 2020.

 Elimination or modernization of small taxes. The Government will eliminate minor taxes or modernizing them and increasing their yield to simplify the system and its administration. This is intended to be carried out in conjunction with the VAT introduction and direct tax reform.

In order to execute these reforms, the Government secured a US$40 million project loan from the IDB, which is being used to implement VAT, modernize customs and tax administration, expand the IFMIS framework and train personnel at various parts of the Ministry of Finance.

Establishment of Sovereign Wealth Fund

In May 2017, the National Assembly passed the Law on the Savings and Stabilization Fund, which provides for the country’s first sovereign wealth fund, the Savings and Stabilization Fund Suriname (the “SSFS”). According to the law, operations of the SSFS were to begin after the end of 2018. The SSFS Board was established in July 2019 and began operating in October 2019. The introduction of a sovereign wealth fund aims at improving revenue management through the stabilization of mining (oil and mineral ore extraction) revenue flowing to the Government and providing an institutional basis for saving future surpluses from mining revenues. The central features of the fund are its fiscal stabilization rules, which mitigate the volatility of Government revenue. Its regulatory framework and management practices are based on international best practices, in particular the Santiago Principles (a set of guidelines that establish best practices proposed by the IMF and others) and were designed based on the experience of other sovereign wealth funds around the world.

The purpose of the SSFS is to save and invest surplus revenue derived from the extraction of non-renewable resources in Suriname with the following objectives:

o Stabilization: cushion the impact of sharp increases or declines in mining revenue on Government revenue during periods of price or export volume instability.

o Savings: provide a constant stream of income for future generations derived from budget support from the Sovereign Wealth Fund from part of the income stream from its invested assets.

o Diversification: over time, as the income stream increases, this will also generate an alternative form of income that reduces the dependence on mining revenue.

73 In order to protect the asset base of the SSFS, transfers from the SSFS to the Government are limited to a certain percentage of the fund’s assets at the beginning of the year, with no transfers from the fund to the budget in the first five years.

Integrated Financial Management Information System (IFMIS)

Budget implementation is being strengthened by the improved administrative, managerial, and control mechanisms embedded in a new integrated public sector financial management information system (“IFMIS”). Its base functionality for automating expenditure management has been fully in place since 2017, while additional modules, such as for revenue, debt, procurement planning, or interactive online transparency, are planned to gradually come on line in between 2019 and 2021. The IFMIS will allow increased transparency, strengthen top-down budgeting and reduce the operating inefficiencies and costs of the public financial management system.

Treasury Department

A new Treasury department has been established, which incorporates functions previously carried out by various departments of the Ministry of Finance, the SDMO and the CBvS. The Treasury department will have a central role in the planning and management of Government liabilities, with financial planning and forecasting being implemented in 2019. The efforts in this area are supported by technical support from the IDB and the U.S. Treasury Department.

Public Sector Procurement

A new centralized procurement department within the Ministry of Finance is planned to be established in 2021 in order to harmonize procurement processes and administer procurement processes for all line ministries. Public sector procurement is currently handled independently by the separate line ministries. This centralization is supported by the IFMIS software and technical assistance from the IDB. The final steps of the implementation of the reform will take place after passage of the Public Procurement law, which is planned to be presented to the National Assembly in 2020.

Public Financial Management Law

A Public Financial Management law, which has been prepared with technical support from various multilateral agencies, was passed in 2018. The new law is expected to streamline and modernize the budget procedures and introduce a fiscal rule to limit the volatility of expenditure and future fiscal imbalances. The full impact of a fiscal rule will only be possible after revenue stabilization has been achieved following the recent establishment of the SSFS and further revenue-stabilizing effects of planned indirect and direct tax reforms.

Macroeconomic Forecasting and Management System

In 2015, the Ministry of Finance and the CBvS jointly established the Working Group on Financial Programming (WGFP), a joint macroeconomic programming and forecasting team, to help define and track the overall fiscal and monetary policy targets. Combined with the work of the revenue forecasting system at the Treasury department and the liquidity forecasting systems maintained by the Treasury department and the CBvS, the WGFP is expected to help establish a more robust medium-term fiscal planning based on realistic projections for revenue and financing.

In addition, the CBvS and the Ministry of Finance jointly established the Macroeconomic Policy Coordination Committee in June 2019 to ensure that monetary and fiscal policy are well-coordinated and to ensure that consistency in data, data management, forecasting methodologies, and policy responses to forecasting changes.

Project and Change Management

A Project and Change Management Unit (the “PCMU”) was established in 2017 with support from the IDB, in order to facilitate the implementation of the various administrative or legislative projects, with its project

74 management and change management components are aimed at accelerating and facilitating the adoption of new techniques and organizational structures. The effort was initially supported by funds provided by Japan under the management of the IDB. The PCMU supports training efforts to strengthen the implementation of the IFMIS system.

Elimination of Electricity Subsidies

Electricity subsidies are estimated to have amounted to approximately US$141 million annually during the period from 2015 through 2019. Electricity subsidies have historically been the largest and most regressive Government subsidy in Suriname. The Government estimates that in June 2019 41% of the benefits of the electricity subsidies (in the form of lower tariffs) accrued to the 20% largest electricity consumers, while the 20% poorest electricity consumers only received 5% of the benefits of the subsidies. See “ – Electricity Subsidies” below.

The Government’s phased elimination of electricity subsidies was announced by the President and began in October 2015. To protect lower-income households from the impact of the tariff adjustment, the Government structured the electricity tariff increases in a progressive manner, with smaller tariff adjustments for smaller-quantity consumers. Nevertheless, the electricity price increase in October 2015 tripled electricity prices on average and was largely responsible for a spike in the inflation rate in November 2015. The Government raised electricity tariffs again in May 2016 to a level that covered 60% of the cost of electricity production. In March 2016, the National Assembly passed the Act on Energy Authority, which established an electricity commission that will review tariffs at least every six months. However, the Government slowed the pace of electricity tariff increases to soften the inflationary impact during the economic crisis in 2016, while remaining committed to their full elimination over time. The Government has committed to resume these reforms with the transfer of the Afobaka HPP and, in the future, EBS’s current principal power generating assets to SPCS, and the Government currently expects that electricity subsidies will be fully eliminated by mid-2024 as part of the broader reform of the electricity sector. Since 2017, subsidies to the electricity sector have been reported directly and not as an off-budget expenditure item. After the reform is in place, energy will be sold by the energy generating company at market rates. As the reform is implemented, remaining subsidies will be provided to EBS to cover the difference between tariff-sourced revenue and the cost of purchased electricity. Any future subsidies to the sector will need to be fully budgeted and are already incorporated in the medium-term fiscal targets of the Government. See “Annex A: Electricity Sector Reform.”

Law on Financial Statements

A new Law on Financial Statements was introduced in October 2017, pursuant to which all legal entities in Suriname that operate as a business, including state-owned entities and subsidy-receiving entities, must prepare and publish annual financial statements. The annual financial statements of large and medium-sized legal entities must be audited by a chartered accountant. In the event of misleading statements in the annual accounts or in the event that the annual accounts are not prepared in time, the directors of the entity are liable to third parties who have suffered damage as a result. This new law is expected to improve transparency, governance and financial accountability in the Surinamese economy, including among state-owned entities and subsidy-receiving entities.

75 Budget Performance

The sharp decline in commodity-related revenues in 2015 contributed to a rapid deterioration of Suriname’s fiscal accounts. While the Government began fiscal reforms in 2015 as part of its economic reform program, sharp declines in revenue in 2016 made it impossible to reduce the fiscal deficit in 2016.

In 2014, 2015, and 2016, the fiscal deficit as a percentage of GDP was 8.5%, 9.8% and 10.7%, respectively. Suriname recorded a fiscal deficit in 2017 of approximately 8.8% of GDP, beginning the gradual process of fiscal consolidation, with a fiscal deficit of 7.9% in 2018. During the first half of 2019, the deficit amounted to 4.0% of forecasted 2019 GDP.

Notwithstanding reductions in expenditures of approximately 3% of GDP in each of 2015 and 2016, the overall fiscal deficit did not decline at the same rate due to a decrease in tax revenue that began after the commodity price shock and continued from 2015 through 2017. Fiscal revenue averaged approximately 24.6% of GDP from 2005- 2013 and decreased to 22.3%% of GDP in 2015 and 18.1% of GDP in 2016. The decline in tax revenue prior to 2016 reflects a decline in tax revenue from mining activities and, in 2016, reflects both the current and lagged effects of the economic downturn. Non-mining revenue decreased from 19.1% of GDP in 2015 to 13.8% of GDP in 2017. Fiscal revenue as a percentage of GDP increased in 2017 to 21.3% in 2017 and 23.1% in 2018, due to a rebound in mining revenue. The fiscal deficit decreased in 2017 to 8.8% of GDP and further to 7.9% of GDP in 2018 due to increases in revenue. At the same time, expenditure increased in 2017 and 2018 primarily due to the beginning of retroactive payments agreed upon during the healthcare reform in 2017 and public sector wage agreements in 2018, which payments are disbursed on a monthly basis and will continue until mid-2020.

The Government expects the fiscal deficit to decrease over the next several years, beginning with the 2019 fiscal year, due to a number of factors. First, the end of the accelerated depreciation of Newmont Goldcorp Suriname’s investments in the Merian gold mine will increase revenue beginning in 2020. At the same time, the expiration of retroactive wage and health system pension contribution payments will reduce expenditure beginning in mid-2020. Beginning in 2020, the reduction in electricity subsidies will benefit the budget and are projected to reach approximately 4.4% of GDP when the reform is fully implemented in 2024. Further ahead, the introduction of VAT is projected to reduce the fiscal deficit by a net of approximately 2% of GDP after the reform is fully implemented in 2023.

Revenue

The Government’s fiscal revenue is comprised of tax revenue and non-tax revenue. Suriname has not recorded any grant revenue since 2011. In 2018, tax revenue represented approximately 69% of Government revenue. Tax revenue in turn is comprised of direct taxes and indirect taxes, which represented 53% and 47% of tax revenue in 2018, respectively.

Fiscal revenue remained relatively constant at an average of 24.8% of GDP from 2005 through 2014 but decreased to 22.3% of GDP in 2015 and 18.1% of GDP in 2016. The decrease in 2015 was entirely due to a decrease in mining revenue, which declined from 4.9% of GDP in 2015 to 3.2% of GDP in 2016. In 2016, GDP contracted sharply, marginally as a result of which mining revenue as a percentage of GDP increased slightly to 3.4%, while as a result of the economic crisis non-tax revenue decreased from 19.1% of GDP in 2015 to 14.7% of GDP in 2016. In 2017, non-mining revenue continued to decrease, to a level of 13.8% of GDP, while mining revenue rebounded strongly to 7.5% of GDP. The increase in mining revenue in 2017 reflected the strong increase in mining and mining- related manufacturing, which helped end the economic crisis and allowed for a small increase in economic growth. While the mining sector rebounded in 2017, the non-mining sector continued to be in a recession. This adversely affected direct tax revenue as wages and profits decreased further, while indirect taxes were also adversely affected by further contraction in the wholesale and retail trade sector. In 2018, mining revenue increased to 8.9% of GDP. As the non-mining sector exited the recession, non-mining revenue began to recover, increasing from 13.8% of GDP in 2017 to 14.9% of GDP in 2018. While this level reflects the return to economic growth in the economy, it is still significantly below the 2006-2015 average level of 18.4% of GDP. Direct tax income was 8.5% of GDP in 2018, near the average level of 8.7% of GDP for 2006-2015, while indirect tax income was 7.6% of GDP in 2018, compared to 8.8% for the 2006-2015 average. A return of pre-crisis levels of real wages, salaries, and profits in the non-mining

76 sector would increase direct tax income toward historical levels, while a return to pre-crisis levels of taxable trade would increase indirect tax income toward historical levels.

Mining revenue mainly consists of direct taxes (principally corporate tax and wage tax) and non-tax revenue (including royalties and dividends) from oil and mineral ore extraction operations. Oil revenue has historically typically contributed more to the public finances than gold or alumina mining proceeds due to dividend payments from Staatsolie to the Government and taxes paid by Staatsolie. Mining revenue has historically been a major source of fiscal volatility. Government revenue from the mining sector decreased from an average of 7.7% of GDP in 2008- 12 to an average of just 3.3% of GDP in 2015-16. In U.S. dollar terms, total mining revenue decreased from US$404 million in 2012 to US$104 million in 2016, while its share in total fiscal revenue decreased from 31% in 2012 to 26% in 2013, decreasing sharply to 14% in 2015 and to 19% in 2016. However, mining revenue increased significantly to SRD 1.8 billion in 2017 from SRD 653 million in 2016 following the commencement of operations at the Merian gold mine on October 1, 2016. The operations of the Merian gold mine are benefitting fiscal revenue from the 6% royalty payable directly to the Government by Newmont Goldcorp Suriname and income tax payments at a 36% tax rate. In addition, taxes and dividends paid by Staatsolie have increased as a result of Staatsolie’s 25% ownership interest in the Merian gold mine and the start of operations of Staatsolie’s expanded refinery. While Staatsolie does not accelerate the depreciation of its invested funds in the Merian gold mine, Newmont Goldcorp Suriname uses accelerated depreciation for its 75% share in the operations. The accelerated depreciation is limited to four years, as a result of which all investments made in the Merian gold mine in 2015 will have been fully depreciated by the end of 2019. Most of the development capital investment in the Merian gold mine was undertaken between the third quarter of 2014 and the fourth quarter of 2016, averaging approximately 2% of GDP per quarter, and the mine began operations in October 2016. The bulk of the investments will be fully depreciated by the fourth quarter of 2019 and will lead to an increase in taxable profits, which are subject to a tax rate of 36% applies. The WGFP and the SSFS project that Newmont Goldcorp Suriname’s income tax payments will therefore increase from 2018 levels gradually by approximately 2.1% of GDP in 2021, beginning gradually in 2019 and accelerating sharply in the first quarter of 2020.

Non-mining revenue has traditionally not increased in line with the growth of the economy, which has prompted the introduction of a number of changes in legislation, regulations, or rate increases to restore historical levels of non-mining revenue. In addition, the economic crisis depressed non-mining revenue collection in relation to GDP and the recovery in the post-crisis has not yet led to a full recovery in historical non-mining revenue to GDP ratios. Non-mining revenue averaged approximately 18.4% of GDP during 2006-2015, decreased to 13.8% of GDP in 2017 and increased to 14.9% of GDP in 2018.

Fiscal policy in 2016 was affected by low mining revenue and the need to adapt the policy to the effects of the rapid rise in inflation. While inflation generally has a positive impact on fiscal accounts, this “inflation tax” phenomenon usually occurs with a significant lag, while the immediate effect of high rates of inflation tends to undermine fiscal performance due to the decrease in corporate profits and the immediate need to increase social or general expenditure, while the revenue impact of inflation is lagged. To support the purchasing power of taxpayers in 2016, the Government decided increase the general allowance in the income tax from the current level of SRD 50 to SRD 125 per month for all taxpayers. The measure is expected to lower income tax revenue by 0.2% of GDP in 2016. This was followed in 2018 by a general and retroactive wage increase in the public sector that partially restored purchasing power. The immediate effect of the wage increase, including retroactive payments, was to increase the Government’s wage sum from 8.0% of GDP in 2017 to 9.4% of GDP in 2018, and further to a projected 11.0% of GDP in 2019. Wage taxes have increased correspondingly with wage increases.

See “– Fiscal Policy and Reforms – Tax Reforms” for a discussion of a wide-ranging set of tax reforms that the Government is implementing in order to minimize Suriname’s vulnerability to revenue fluctuation going forward.

Expenditure

Subsidies and transfers have been the Government’s largest expenditure item since 2014. In 2016, subsidies accounted for 31.5% of total expenditure. Beginning in 2017, electricity subsidies were included as part of expenditures, whereas prior to 2017 electricity subsidies largely constituted an off-budget expenditure item. In 2016, 2017 and 2018, subsidies accounted for 31.6%, 33.7% and 44.1% of total expenditure. The increase in 2017 reflects the inclusion of electricity subsidies that were previously unrecorded and netted out with revenue items. Recorded electricity subsidies increased from 1.9% of GDP in 2016 to 4.3% of GDP in 2017. Subsidies increased from 10.0%

77 of GDP in 2017 to 13.6% of GDP in 2018. Electricity subsidies increased from 4.3% of GDP in 2017 to 4.8% of GDP in 2018 as energy costs increased. The significant increase in subsidies in 2018 is attributable to an increase in the amount of electricity subsidies and the impact on subsidies of the concurrent and retroactive elements of the health care reform. For the six months ended June 30, 2019, subsidies amounted to 5.7% of projected 2019 GDP compared to 6.4% of GDP for the six months ended June 30, 2018.

Civil service wages constitute the Government’s second largest expenditure item, which represented 30.6% of total expenditure in 2018. Civil service wages are negotiated between the Ministry of Finance and the civil service union. All civil service employees are members of the association of civil service unions. The Ministry of Finance characterizes these negotiations as cooperative and its relationship with the association of civil service unions as generally amicable, noting that there are no areas of contention with the union other than routine annual salary negotiations. Public wages for teachers were increased by approximately 35% in 2017, followed by an approximately 25% wage increase to other civil servants, which was announced in September 2018 and has been applied retroactively to January 2017. The retroactive payments for 20 months are paid in monthly installments and will cease in May 2020. Wages and salaries increased to SRD 2.4 billion in 2018 from SRD 1.9 billion in 2017 due to salary increases for teachers and civil servants and the beginning of retroactive payments. For the six months ended June 30, 2019, wages and salaries amounted to 5.1% of projected 2019 GDP compared to 3.8% of GDP for the six months ended June 30, 2018, which was before the announcement of the retroactive wage increases.

From 2005-2010, procurement of goods and services was the Government’s second largest expenditure item, averaging 5.7% of GDP during that period. Continued expenditure controls and improved oversight and management reduced the relative share of procurement of goods and services over time. In 2018, this expenditure item, on a cash basis, amounted to 3.4% of GDP. For the six months ended June 30, 2019, this expenditure item amounted to 1.4% of projected 2019 GDP compared to 1.1% of GDP for the six months ended June 30, 2018. Small outstanding payments relating to procurement of goods and services are typically outstanding at any point in time, although the gradual implementation of the IFMIS system uncovered larger levels of arrears in respect of 2015 through 2018. Interest expenses increased with higher debt levels and the increased reliance on more expensive commercial debt. Interest expenses increased from 2.6% of GDP in 2016 to 2.8% of GDP in 2017 and 3.6% of GDP in 2018.

Fiscal expenditure increased from 28.8% of GDP in 2016 to 29.7% of GDP in 2017 due to increases in subsidies and capital expenditures. Subsidies increased by 0.9% of GDP solely due to the full inclusion of electricity subsidies as expenditures for the first time in 2017. Capital expenditure increased from 3.8% of GDP in 2016 to 5.1% of GDP in 2017.

Fiscal expenditure increased from 29.7% of GDP in 2017 to 30.7% of GDP in 2018. The increase was due to the 2018 wage agreements and the 2017 health care reform, both of which provided for retroactive payment agreements that affected 2018 and will continue until mid-2020. Expenditure on wages, including the payment of retroactive wage increases, increased from 8.0% of GDP in 2017 to 9.4% of GDP in 2018. Health sector reform also necessitated regular and retroactive payments into the health care sector pension fund and for health sector capital investments, which increased on a cash basis from 0.7% of GDP in 2017 to 1.9% of GDP in 2018 and from 1.4% of GDP in 2017 to 2.9% of GDP in 2018, respectively. In 2018, the Government also made substantial additional payments amounting to 3.8% of GDP in respect of payment commitments from previous years. Most of these payments were for goods and services and subsidies, where the obligations became evident as the new electronic expenditure automation system IFMIS came online.

As is common in public finances, capital expenditure is a highly volatile expenditure category, dependent on available financing and the absorptive capacity of the economy. From 2006 through 2014, capital expenditure averaged 4.7% of GDP. With the decline in fiscal revenue in 2015 and 2016, capital expenditure was curtailed and declined to 2.6% of GDP in 2015 and 3.8% of GDP in 2016. As fiscal revenue increased in 2017 and 2018, capital expenditures increased in those years to 5.1% of GDP in 2017 and 4.7% of GDP, respectively. For the six months ended June 30, 2019, this expenditure item amounted to 2.1% of projected 2019 GDP compared to 1.2% of GDP for the six months ended June 30, 2018.

78 Electricity Subsidies

The Government has implicitly encouraged excessive consumption of electricity in Suriname through the provision of substantial subsidies. Electricity subsidies have been the largest Government subsidy in recent years, and they are regressive in that the largest consumers of electricity receive the largest benefits from the low tariffs that are supported by the subsidies. Overall, subsidies have amounted to an average of US$125 million annually from 2012 through 2016, increasing to US$133.7 million in 2017 and US$165.8 million in 2018. These subsidies have mainly been provided to EBS indirectly, as Staatsolie has delivered electricity from its electricity subsidiary SPCS to EBS and has delivered diesel and heavy fuel oil to EBS for use in its thermal generators, and the Government has indirectly paid for such deliveries through a reduction in tax income and dividends received from Staatsolie. The existing power purchase agreement (“PPA”) between SPCS and EBS specifically allows Staatsolie to reduce tax or dividend payments to the Government by any amounts past due from EBS. This has resulted in substantial reductions in revenue received by the Government from Staatsolie. This subsidy was only incorporated in Government revenue and expenditure statistics beginning in 2017. In addition, the Government has purchased hydroelectric power from Suralco and provided such power to EBS without requiring EBS to pay for it. Subsidies to EBS have been necessary as electricity tariffs cover only about a third of the true cost of electricity generation. Attempts were made in October 2015 and June 2016 to adjust tariffs to levels closer to the cost of electricity generation, but these efforts were insufficient, in particular as tariffs are defined in SRD and the production cost is largely determined by the international oil price, which is denominated in U.S. dollars. The devaluation in 2015 and the depreciation in 2016 eliminated the cost recovery elements of the tariff increases in 2015 and 2016.

Prior to 2017, electricity subsidies were largely not reflected in the Government’s budget. A part of these subsidies constituted the Government’s only off-budget expenditure, as part of the subsidies was realized through non- receipt of revenue from Staatsolie. As a result of recent improvements in data collection and GFS reclassification, beginning in 2017 all subsidies are now recorded as expenditures in the fiscal budget.

The following table sets out information on electricity subsidies provided by the Government by way of Afobaka HPP electricity purchases, Staatsolie fuel and electricity purchases and certain other subsidies, in the years presented. This table does not include certain other subsidies generally considered subsidies in economic theory, such as losses at the electricity company or the lack of indirect tax revenue on electricity consumption.

2014 2015 2016 2017 2018 2019(1) (in millions of SRD) Electricity subsidies 673.7 407.6 486.9 1,009.1 1,253.1 1,259.6 Via Afobaka HPP electricity purchases 184.2 119.0 182.9 391.0 527.3 530.1 Via Staatsolie fuel and electricity purchases 464.3 227.0 238.8 588.1 695.8 699.5 Other subsidies 25.2 61.6 65.1 30.0 30.0 30.0 (in percent of GDP) Electricity subsidies 3.9 2.5 2.5 4.2 4.9 4.4 Via Afobaka HPP electricity purchases 1.1 0.7 0.9 1.6 2.0 1.9 Via Staatsolie fuel and electricity purchases 2.7 1.4 1.2 2.4 2.7 2.5 Other subsidies 0.1 0.4 0.3 0.1 0.1 0.1 ______(1) Forecast by WGFP.

The Government has embarked on a comprehensive energy sector reform program, with tariff increases being an essential component of the reform. All generation assets will be centralized under SPCS, in order to create greater efficiencies that will reduce the necessary scope for tariff adjustments. If energy generation costs are lower, the tariffs will not need to be raised as much to eliminate the subsidies. Nevertheless, the Government is committed to raising electricity tariffs gradually over the next five years, beginning in June 2020. The Government estimates that annual increases of approximately 18% will be sufficient to eliminate all subsidies by June 2024.

The electricity subsidies currently being provided by the Government are by their nature highly dependent on the market price for oil, as such price determines the cost of thermal electricity generation and also forms the contractual basis for the price at which Suralco has sold electricity to EBS from the Afobaka HPP. Subsidies are estimated to have amounted to 2.4% of GDP in 2012, 1.9% of GDP in 2013, and 3.9% of GDP in 2014. As the oil

79 price declined in late-2014 and the electricity tariff increases began to be phased-in in late-2015, subsidies declined to 2.5% of GDP in 2015 and 2.5% in 2016. Subsidies began to increase again to 4.2% of GDP in 2017 and 4.9% in 2018. While all of the non-payments by EBS have been recorded as liabilities in the EBS balance sheet, the accumulated debt from EBS to the Government derived from subsidies reached approximately SRD 1.6 billion by end-2018. The Government does not expect that EBS will be able to repay this debt without the Government first making a capital contribution to EBS.

The principal components of the electricity subsidies provided by the Government that have affected the fiscal accounts of the Government in recent years are the following:

 Suralco has sold a minimum of 80 MW of hydroelectric power from the Afobaka HPP to the Government at market prices linked to international oil prices, in accordance with a 1999 PPA. The Government in turn has provided this energy to EBS, which does not reimburse the Government for the payments to Suralco. From 2012-2014, this subsidy amounted to approximately 1% of GDP annually, and it declined to approximately 0.8% of GDP in 2015-2016 as the oil prices declined. With higher oil prices, subsidies though this channel increased to 1.6% of GDP in 2017 and 2.0% of GDP in 2018. This subsidy was recorded in the fiscal accounts as a purchase of goods and services before being reclassified as an electricity subsidy in 2017.

 EBS owns and operates various thermal electric power plants powered by diesel fuel or heavy fuel oil provided by Staatsolie, for which EBS does not fully pay. Staatsolie has an agreement with the Government to deduct an amount equal to the cost of the unpaid fuel or electricity provided by Staatsolie to EBS from the regular tax or dividend payments to the Government. In 2012, this subsidy amounted to approximately 1.2% of GDP, decreasing to approximately 0.7% of GDP in 2013 and increasing to 2.7% of GDP in 2014. In 2015- 2016 this subsidy decreased to an average of 1.3% of GDP. In 2017, subsidies channeled through Staatsolie increased to 2.4% of GDP and further to 2.7% in 2018. This subsidy was not recorded in the fiscal accounts until 2017 as the fiscal accounts only recorded Staatsolie net cash payments after deducting its share of electricity subsidies. This was changed in 2017 with the improvements in GFS accounting.

 EBS receives a budgeted subsidy for the provision of electricity to remote areas in the interior of Suriname. This subsidy has amounted to approximately 0.2 % of GDP annually since 2012. There is no intention of removing these subsidies for rural development and electrification.

 Not included in the estimation of subsidies received by EBS are EBS’s losses in its profit and loss statement and the lack of taxation of electricity services, both of which also constitute subsidies according to the international definition of subsidies under the Government Finance Statistics manual issued by the IMF. These subsidies, which are not recorded by the Government, have amounted to approximately 0.5-0.9% of GDP annually since 2012. They are not included in the total electricity subsidy calculations discussed elsewhere in this Offering Memorandum, which are focused on cash subsidies that have been provided by the Government.

See “ – Electricity Subsidies”, “ – Fiscal Policy and Reforms – Elimination of Electricity Subsidies” and “The Surinamese Economy – Principal Sectors of the Economy – Electricity, Gas and Water Supply.” and “Annex A: Electricity Sector Reform.”

80 Large-Scale Oil and Gold Projects

The following is a description of certain recent and current large scale oil and gold projects in Suriname, which are material to Suriname’s public sector finances.

Expanded Staatsolie Oil Refinery

In December 2015, Staatsolie completed its oil refinery expansion project aimed at substantially reducing the Republic’s exports of crude oil and imports of refined fuel. The expanded refinery was built at a cost of approximately US$1 billion or a cumulative 18% of GDP during 2013-2015. Prior to the refinery being expanded, Suriname exported crude oil to Trinidad and Tobago for processing and imported refined fuel. As of 2016, Suriname no longer exports crude oil and has significantly reduced imports of refined products, which has had a positive effect on the Republic’s current account estimated at approximately 2% of GDP annually. Since June 2017, when the refinery reached full capacity, net oil trade has been only marginally negative. See “Balance of Payments and Foreign Trade – Current Account.”

Merian Gold Mine

The Merian gold mine is a gold mine located 65 kilometers in the area of Merian in the district of Marowijne in East Suriname close to the French Guyana border and covers 500,000 hectares. After 10 years of exploration, the construction phase started in August 2014 and construction was completed in August 2016. Full commercial operations began on October 1, 2016. Newmont Goldcorp Suriname is 75% owned by Surgold, a subsidiary of Newmont Goldcorp Corporation, an American mining multinational company and 25% owned by Staatsolie. Prior to May 2018, the 25% stake was shared between Staatsolie (20.2%) and the Government (4.8%). In May 2018, Staatsolie purchased the Government’s 4.8% beneficial ownership interest for US$76 million with part of the proceeds of a loan that was provided to Staatsolie by the Government with part of the proceeds from the Republic’s 2016 bond issuance. Staatsolie is a limited partner in the Newmont Goldcorp Suriname and is only a financial investor with no role in the operation of the project.

Gold export volumes from Suriname have increased significantly as a result of the beginning of production at the mine. Under the agreement entered into between the Republic and Newmont Goldcorp Suriname and passed as a law, the Republic is entitled to royalties and to collect income taxes at a rate of 36%. The Government receives a 6% royalty on any gold extracted starting from October 1, 2016. Of the remaining 94% of ore extracted, Staatsolie receives 25% of profits after operational costs. The income taxes at a rate of 36% are only expected to materialize starting gradually in 2019 in view of an accelerated depreciation schedule provided for in the agreement. The agreement stipulates that every investment can be depreciated over four years, meaning that all investment that took place in 2015 will have been fully depreciated by 2019. As the mine and mill construction ended in August 2016, it can be expected that the bulk of the investments will have been fully depreciated by August 2020. The Merian gold mine has had a significant positive effect on the Republic’s current account in the balance of payments since production began in October 2016, when exports began and construction investment ceased, with the exception of the large income repatriation which will partially end with the completion of the accelerated depreciation.

While Newmont Goldcorp Suriname is using the Merian gold mine as the main ore feeder for its mill, it is working on two new mining sites near Maraba and Sabajo. The mine at Maraba is expected to become operational in 2024 and will help reduce operational costs at the mill. Investments have also begun at Sabajo and it is expected that the mine will become operational in 2020.

According to Newmont Mining Corporation, the Merian gold mine produced 534,000 ounces of gold (100% basis) in 2018 and reported approximately 4.9 million ounces of gold reserves (100% basis) at December 31, 2018. According to Newmont Mining Corporation, the estimated mine life (from the start of commercial production) is 11- 13 years. However, further exploration continues with the goal of extending the level of reserves through continued exploration, and the concession also includes rights of first refusal to any new gold mining concession in a large area in the northeast part of Suriname.

81 The following table sets forth selected financial and operating information of the Merian gold mine for the periods presented:

Year Ended December 31, 2017 2018(1)

Gold reserves (thousand ounces) (at year end)(2), of which: 5,293 4,973 Staatsolie share (25%) 1,323 1,243 Gold production (thousand ounces), of which: 513 534 Staatsolie share (25%) 128 134

(1) Cut-off grade utilized in 2018 reserves not less than 0.010 ounce per ton. (2) Includes proven and probable reserves. Ounces are estimates of metal contained in ore tonnages and do not include allowances for processing losses.

The following table summarizes the consolidated assets and liabilities of Newmont Goldcorp Suriname. Such information has been extracted from U.S. GAAP financial information contained in the Newmont Goldcorp Corporation Form 20-F for 2018 and Form 10-Q for the quarterly period ended March 31, 2019. The figures in this table are for Newmont Goldcorp Suriname as a whole. Staatsolie owns a 25% interest in such company.

As at December 31, As at March 31, 2017 2018 2019 (US$ millions) Cash and cash equivalents 27 40 69 Inventories 79 82 79 Stockpiles and ore on leach pads 21 35 40 Other current assets 6 5 2 Property, plant and mine development, net 769 766 757 Other non-current assets 8 4 4 Total assets 910 970 1,004 Total liabilities 68 76 81

Rosebel Gold Mine

Suriname has a long-standing relationship with IAMGOLD Corporation, a Canadian gold producer, which operates a gold mine and mill in the area of Rosebel in Suriname pursuant to a concession granted in 1994. The concession is held by Rosebel Gold Mines N.V. (“Rosebel Gold Mines”), an entity 95%-owned by IAMGOLD Corporation, with the remaining 5% held by Staatsolie. The mining concession covers 17,000 hectares in the District of Brokopondo, between the Suriname River to the east and the Saramacca River to the west, and is surrounded by exploration concessions covering an additional 85,300 hectares. According to IAMGOLD Corporation, as of December 31, 2018 the Rosebel gold mine had proven and probable mineral reserves of 3.5 million ounces estimated in accordance with NI 43-101.

82 The following table sets forth certain information in respect of the Rosebel gold mine for the years presented.

Rosebel Gold Mine(1) Year Ended December 31, 2017 2018 Gold production (thousand ounces) 318 302 Ore milled (thousand tons) 12,832 12,209 Head grade (g/t) 0.83 0.82 Recovery (%) 93 94 Average realized gold price (US$/ounce) 1,260 1,268 Royalties (US$/ounce) 69 71 Royalties paid (US$ millions)(2) 22.0 21.5 ______(1) All figures on a 100% basis. (2) 2% in-kind royalty per ounce of gold production and price participation of 6.5% on the amount exceeding a market price of US$425 per ounce when applicable, using for each calendar quarter the average market price determined by the London Gold Fix P.M. In addition, 0.25% of all minerals produced at Rosebel are payable to a charitable foundation for the purpose of promoting local development of natural resources within Suriname. Source: IAMGOLD Corporation 2018 Annual Report

According to IAMGOLD Corporation’s 2018 Annual Report, IAMGOLD Corporation expects production at the Rosebel gold mine in 2019 (on a 100% basis) to be in the range of 330,000 to 347,000 ounces.

Saramacca Gold Project

On June 6, 2013, IAMGOLD Corporation, Rosebel Gold Mines and the Republic agreed to establish an unincorporated joint venture for the development of the so-called Saramacca deposits, with the participation of Rosebel Gold Mines in the unincorporated joint venture being 70% and the participation of the Republic being 30%. Between 2013 and 2018, Rosebel Gold Mines and the Republic of Suriname signed several documents in order to materialize the transaction. On December 12, 2016, the Republic transferred the exploration right in respect of the deposit (GMD 706/16) to Rosebel Gold Mines. On October 16, 2018, the Republic, IAMGOLD Corporation and Rosebel Gold Mines entered into a Memorandum of Understanding. The Memorandum of Understanding provides that Rosebel Gold Mines will purchase the Republic’s 30% interest in the unincorporated joint venture. However, on July 18, 2019, the Republic announced that it is no longer negotiating with Rosebel Gold Mines in relation to the sale of its 30% interest of 30% in the unincorporated joint venture.

On August 7, 2019, IAMGOLD Corporation reported initial drilling results testing the underground mining potential of the Saramacca project. Drilling highlights included: 21.0 meters grading 6.05 g/t Au including 10.5 meters grading 9.72 g/t Au; 22.7 meters grading 8.54 g/t Au including 9.0 meters grading 15.23 g/t Au; 24.0 meters grading 9.67 g/t Au including 6.0 meters grading 26.41 g/t Au. According to IAMGOLD Corporation, as of December 31, 2018, the Saramacca concession had (on a 100% basis) 26,549,000 tons of probable reserves, 1.8 g/t grade and 1,542,000 contained ounces; 27,938,000 tons indicated resources, 2 g/t grade and 1,763,000 contained ounces; and 11,825,000 tons inferred resources, 0.7 g/t grade and 273,000 contained ounces. Mineral reserves were estimated as of December 31, 2018 using a US$1,200/ounce gold price and mineral resources were estimated as of December 31, 2018 using a US$1,500/ounce gold price and were estimated in accordance with NI 43-101. Gold production at Saramacca began in October 2019.

Bronkolonko Gold Project

Part of the joint venture and area of interest of IAMGOLD Corporation is the Bronkolonko gold mining concession. IAMGOLD Corporation is currently exploring the area with a view to incorporating its ore into the Rosebel mill over time. Gold has not yet been produced from the Bronkolonko concession.

83 State-Owned Companies

Staatsolie

Staatsolie is a state-owned oil company that was founded in 1980. Staatsolie holds the exclusive concession rights for exploration and production to all onshore and offshore hydrocarbon reserves in Suriname, giving it an effective monopoly on these activities, although its monopoly does not extend to retail distribution. Staatsolie’s core activities are exploration, crude oil production (approximately 16,400 bpd in 2018, all onshore), producing gasoline and diesel (approximately 7,200 bpd in 2018) and retail fuel distribution (2,782 bpd in 2018). See “Principal Sectors of the Economy – Mining, Oil and Manufacturing – Oil.”

In addition to its primary business of exploring for and producing crude oil and refined products in Suriname, Staatsolie also has the following non-core activities and interests:

 Staatsolie’s power generation subsidiary, Staatsolie Power Company Suriname (“SPCS”), began commercial operations in 2006. SPCS is currently the owner of the 96 MW power generation assets located adjacent to Staatsolie’s oil refinery. SPCS has a purchase power agreement with the Government of Suriname for output of its facility. See “Annex A: Electricity Sector Reform.”

 Following the closing of the offering of the Notes, Staatsolie will own the Afobaka HPP (189 MW installed capacity- 100MW average generation) as an addition to its power generation assets. As a second stage, Staatsolie is expected to acquire the Saramaccastraat Thermal Plant from EBS.

 Staatsolie owns a 25% equity interest in the Suriname Gold Project, a limited partnership with Newmont Suriname (Newmont Goldcorp Corporation).

Staatsolie has expanded significantly in recent years to its current size of more than 1,000 employees. As of December 31, 2018, Staatsolie had US$47.2 million in cash and cash equivalents and US$688.1 million in short term and long term financial debt, and shareholders’ equity amounted to US$1.2 billion, or 55% of total assets of US$2.2 billion.

The following table sets forth information on Staatsolie’s operating results for the years indicated.

Staatsolie Operating Results Year Ended December 31, 2014 2015 2016 2017 2018 (US$ millions) Gross sales 1,056 583 358 434 506 Profit / (loss) before tax 400 29 (9) 94 149 EBITDA 457 122 144 285 355 ______Source: Staatsolie Annual Reports 2015-2018

Staatsolie has historically paid (either in cash or as a settlement) approximately 50% of its net income as dividends to the Government. Staatsolie and the Government have agreed to a formal dividend policy whereby Staatsolie will pay out 50% of its net income until 2026. Total contributions by Staatsolie to the Government budget for 2018 amounted to US$150 million of payments or settlements in dividends, taxes and royalties.

84 The following table sets forth the amount of transfers made by the Government to Staatsolie from 2014 to 2018 as a percentage of GDP.

Staatsolie Contribution to Government(1) Year Ended December 31, 2014 2015 2016 2017 2018 (as a percentage of GDP) 0.63% 0.09% 4.2% 4.4% 4.4% ______(1) Contribution comprises dividends, taxes and royalties. Source: Staatsolie

The following table sets forth the amount of dividends declared by Staatsolie to the Government in respect of each of the years presented. Dividends historically have been paid by Staatsolie to the Government after settlement of the dividend declared against liabilities owed by the Government to Staatsolie, in accordance with an agreement between Staatsolie and the Government for these settlements.

Staatsolie Dividends Declared to Government Year Ended December 31, Year in respect of which dividend declared 2015(1) 2015(2) 2016(3) 2017(4) 2018(5) (US$ thousands) Amount of dividend declared 7,347 16,620 - 31,467 50,153 ______(1) Calculated under U.S. GAAP. Paid in 2016. (2) Calculated under IFRS. Paid by way of settlement with the Government in 2018. Dividend became payable following Staatsolie’s conversion from U.S. GAAP accounting to IFRS beginning with the 2017 fiscal year. (3) No dividends were paid in respect of 2016 as Staatsolie had a loss in that year. (4) Interim dividend of US$6 million paid in 2017. Remainder paid in 2018 by way of settlement with the Government. (5) Interim dividend in respect of 2018 of US$15.802 million was paid during 2018 and the remainder was paid in 2019 by way of settlement with the Government.

EBS

The Government owns 100% of EBS, the national electricity company of Suriname and the owner and operator of two thermal electric power plants and Suriname’s sole distributor of electricity. See “ – Fiscal Policy and Reforms – Elimination of Electricity Subsidies”, “ – Electricity Subsidies,” “The Surinamese Economy – Principal Sectors of the Economy – Electricity, Gas and Water Supply” and “Annex A: Electricity Sector Reform.” As a result of many years of below-cost tariffs and accumulated losses, EBS has accumulated approximately SDR 1.6 billion in liabilities to the Government, or approximately US$212 million of liabilities on its balance sheet. In addition to generating, transmitting and distributing electricity in Suriname, EBS buys gas for cooking (which is imported and sold to EBS by third parties) and delivers it to customers.

State-Owned Banks

The Government fully owns two banks: Surinaamse Postspaarbank and Surinamese Volkscredietbank, which absorbed the smaller Landbouwbank NV in early 2016. These banks constitute a very small share of Suriname’s banking market. The state-owned banks are generally less healthy than the private sector banks, and suffer from relatively poor asset quality and management.

The Government also owns 51% of Hakrinbank. The Government’s stake in Hakrinbank is a holdover from that bank’s failure in the 1970s, which was the last time a bank failed in Suriname. The Government appoints two of Hakrinbank’s seven board members and takes a passive management role, in spite of its majority stake. The Government also owns a 2.3% stake in De Surinaamsche Bank.

See “Monetary and Financial System – Banking and Financial Institutions.”

85 GOVERNMENT DEBT

General

Suriname’s debt has increased significantly in recent years. Suriname historically maintained a low debt-to- GDP ratio, but the commodity price shock led to a sharp increase in the debt-to-GDP ratio from 33.3% in 2014 to 57.4% in 2016 and 86.9% in 2017. Large fiscal deficits, currency devaluation, and weak economic growth have been the main causes of the increase in debt. A significant component of the increase in 2016 was the issuance of Suriname’s offering in October 2016 of US$550 million 9.25% Notes due 2026. Suriname’s ratios of debt to GDP have stabilized since 2017 due to a reduction in the fiscal deficit, renewed economic growth, a stable exchange rate, and some reliance on non-debt creating forms of fiscal financing such a privatization. Suriname’s public external debt was US$1,715.4 million or 68.9% of total debt at the end of 2018. The Government’s debt-to-GDP ratio was 68.1% as at December 31, 2018. As of July 2019, and according to the Suriname definition of debt, total debt was SRD 20,461.6 million SRD, of which SRD 13,218.4 million comprised external debt.

Suriname’s debt is governed by State Debt Act 2002 of the Republic, as amended (the “State Debt Act”). The Suriname Debt Management Office was established in 2004. The State Debt Act previously specified a total debt ceiling of 60% of GDP, with external and domestic debt not to exceed 45% and 15% of GDP, respectively. Amendments to the State Debt Act were made in 2011, 2016, 2017 and 2019. In 2011, the State Debt Act was amended to reflect new external and domestic debt ceilings: the external debt ceiling was changed to 35% of GDP and the domestic debt ceiling was changed to 25% of GDP. In 2016, the State Debt Act was amended to adopt the international definition of debt. Further amendments were made in 2017 to limit the budgeted fiscal deficit to 6.5% of nominal GDP in 2017 until the state debt was to be below the debt ceiling and to 5% of nominal GDP in the following five years in the event the state debt would not be below the debt ceiling in those years. Amendments were made in 2017 to provide the Government authorization to exceed the debt ceiling annually to the extent necessary to cover the budgeted fiscal deficit and to the extent necessary to cover a maximum of 10% of its operational costs. The State Debt Act was again amended on November 7, 2019 to increase the total debt ceiling from 60% of GDP to 95% of GDP. Suriname’s public external debt is principally composed of bonds and multilateral and bilateral debt, while domestic debt is mostly composed of credit from the CBvS and T-bills.

In light of limited domestic private or external financing, in 2015 the Government obtained a large loan from the CBvS (SRD 2.5 billion or approximately 15% of 2015 GDP) with a fixed rate of 3.5% and a 30-year maturity. Of this, approximately SRD 1 billion represented new financing, while the remainder replaced existing Government debt, substantially lengthening its maturity and lowering the average interest rate. The bulk of the new financing was used to pay down a large stock of domestic arrears, and this repayment increased local currency liquidity in the system. It also reduced NPLs at commercial banks, as Government suppliers had begun to experience payment difficulties due to the increase in non-payments by the Government. As a result of this large one-time domestic loan from the CBvS, most Government financing in 2015 was of a domestic nature, with only limited recourse having been made to external financing.

In April 2016, Suriname issued US$86 million 8.57% Senior Notes due September 2017, which constituted the first-ever sovereign bond issue of the Government of Suriname. The proceeds of the issue were used by the Government to repay a bilateral loan and to make an equity investment in Newmont Goldcorp Suriname.

On May 27, 2016, the Executive Board of the IMF approved a 24-month SBA for Suriname, in an amount of SDR 342 million (approximately US$478 million), to support the Government’s economic reform program. Upon approval of the arrangement, a disbursement was made in an amount of SDR 58 million (approximately US$81 million). The IMF disbursements, which are a liability of the CBvS, do not constitute government debt according to international definitions and are only used towards increasing the net international reserves of the CBvS. In view of the improvement in the current account of the balance of payments, which had a surplus in the fourth quarter of 2016 and during 2017, the Government decided to cancel the SBA in April 2017. The Government received disbursements from the CDB and IDB in June 2016 for a total of US$120 million.

Until May 2016, the CBvS was legally permitted to lend to the Government up to a maximum of 10% of the Government’s projected revenue. This limit was calculated on a gross basis (i.e., based on the Government’s short- term liabilities at the CBvS, without netting its substantial deposits at the CBvS). In May 2016, the Minister of Finance

86 and the Governor of the CBvS signed a temporary, legally binding Memorandum of Understanding (MOU) limiting the gross outstanding Government liabilities to the CBvS to the amount outstanding at end-March 2016 and precluding any further extension of credit to the Government during the time of validity of the MOU. After the end of the financial crisis and in light of the 10% real reduction in CBvS borrowing by the government, the MOU was ended in February 2019 and the borrowing limit established in the Bank Act was reestablished again.

In 2017, government net financing requirements peaked at SRD 2,107.5 million. This was financed to a similar extent from domestic and external sources, with net external disbursements amounting to SRD 983.4 million. This increased external debt from US$1,425.2 million at end-2016 to US$1,682.7 million at end-2017. Domestic net financing of the fiscal balance amounted to SRD 1,194.9 million. Some part of the domestic financing was non-debt creating, as it included SRD 602.4 million in drawdowns of government deposits at the CBvS. In total, domestic debt increased from SRD 3,797.1 million at end-2016 to SRD 5,392.5 million at end-2017.

The fiscal balance improved slightly in nominal SRD terms in 2018, with the net financing requirement declining to SRD 2,028.3 million. About SRD 563 million was financed through the sale of the governments share in the Suriname Newmont joint venture. Net external financing amounted to SRD 327.1 million. This increased external debt from US$1,682.7 million at end-2017 to US$1,714.5 million at end-2018. Domestic net financing of the government amounted to SRD 1,138.3 million, although the gross financing need was higher as the government repaid a net of SRD 993 million in payments that were committed to in previous years. In total, domestic debt increased from SRD 5,392.5 million at end-2017 to SRD 5,832.8 million at end-2018.

As of June 30, 2019, approximately 31.2% of Suriname’s public external debt is represented by Suriname’s outstanding 9.25% Notes due 2026, approximately 29.5% is owed to the IDB and approximately 22.6% is owed to the Chinese government, including China Eximbank. Debt to both IDB and the Chinese government have low interest rates and long-term repayment periods. As of June 30, 2019, debt to IDB was US$519.5 million and debt to the Chinese government was US$398.2 million. The Republic has no external payments arrears outstanding as of the date of this Offering Memorandum.

The Government will be the sole obligor under the Notes being offered pursuant to this Offering Memorandum and the Government’s debt service projections take into account the full impact of the interest and principal as it is projected to come due. The significant reduction in costs to the Government and the economy in general from the electricity sector reform should provide ample funds to service the new obligation.

87 The following table sets forth the composition of Suriname’s Government debt as of the dates indicated.

Government Debt As of June As of December 31, 30, 2014 2015 2016 2017 2018* 2019* (US$ millions, unless indicated otherwise) Government debt Domestic debt (1) 626.2 1,137.6 939.9 720.4 775.6 964.4 CBvS 188.9 745.8 602.7 314 311.6 400.7 Other banks 280.0 175.1 224.9 287.1 348 443.2 Private sector 94.3 151.7 112.3 119.3 116 120.5 - Undisbursed amounts and non-called guarantees (2) 63.0 65.0 External debt (3) 1,088.8 1,215.0 1,425.4 1,682.7 1,715.4 1,761.1 - Undisbursed amounts and non-called guarantees(4) 278.2 338.3 n/a n/a n/a n/a Total Government debt 1,715.0 2,352.6 2,365.3 2,403.1 2,491.0 2,725.5

Total debt service 114.9 340.8 366.3 213 335.7 116.5 Total public debt (as a percentage of GDP) 33.3 52.4 57.4 76.2 73.7 74.4 Domestic debt (1) (as a percentage of GDP) 12.2 22.9 22.8 22.9 22.9 26.3 External debt (3) (as a percentage of GDP) 21.1 29.5 34.5 53.4 50.8 48.1 External debt service (5) (as a percentage of exports) 2.2 2.9 13.9 6.1 10 n/a Memorandum items GDP (SRD millions) 17,294.1 16,669.3 19,489.4 4,035.4 25,806.0 28,368.7 Exports 2,356.0 1,856.5 1,625.2 2,195.1 2,301.2 n/a ______n/a Not applicable. (1) Domestic debt of the central government, excluding other public sector internal debt such as central bank bills, quasi-fiscal debt, municipalities and other decentralized institutions. (2) Beginning in 2016, undisbursed amounts and non-called guarantees ceased to be part of the definition of central government debt and are no longer recorded as debt, consistent with international best practices. (3) External debt of the central government, excluding the CBvS and decentralized institutions. (4) In accordance with the amendment of the State Debt Act, beginning in 2016, undisbursed amounts and non-called guarantees ceased to be part of the definition of central government debt and are no longer recorded as debt, consistent with international best practices. (5) External debt service includes commissions, interest and principal. * Preliminary data. Note: Data presented in accordance with the national definitions established by the SDMO. Data through the end of 2015 includes amounts of contracted debt yet to be drawn and non-called guarantees. In accordance with the State Debt Act, exchange rates used to convert foreign currency debt to SRD and vice versa are the exchange rates quoted by the CBvS as at the last banking day of the calendar year to which the nominal GDP as published by the General Bureau of Statistics refers. Source: SDMO.

External Debt

Suriname has outstanding bilateral loans, mainly from China, France and India, and multilateral loans, mainly from the IDB, CDB, OPEC and ISDB.

In April 2016, Suriname issued US$86 million 8.57% Senior Notes due September 2017, which constituted the first-ever international sovereign bond issue of the Government of Suriname. The proceeds of the issue were used to repay a bridge loan from Republic Bank and to make an equity investment in Newmont Goldcorp Suriname.

In June 2016, the CDB and IDB provided a total of US$120 million in program loans to the Government in support of the Government’s economic reform program.

88 In October 2016, Suriname issued US$550 million 9.25% Notes due 2026. The majority of the net proceeds of the issue were used to make a US$261.5 million loan to Staatsolie, with the remainder of the proceeds used to repay the 8.57% Senior Notes due September 2017, to make an equity investment in Newmont Goldcorp Suriname, to repay a bilateral loan and for general budgetary purposes.

In January 2018, Suriname issued US$46.5 million 9.0% Notes due June 2019. The proceeds of the issue were used for general budgetary purposes.

In May 2018, Staatsolie repaid its US$261.5 million loan from the Government. The 9.0% Notes due June 2019 were repaid by the Government following the repayment by Staatsolie of that loan. The Government also reduced the rollover of domestic T-bills and financed operations to a larger extent by drawing down on its foreign currency deposits at the CBvS stemming from the Staatsolie repayment.

The following table shows the composition of the Surinamese Government’s external debt of the central government (excluding the CBvS and decentralized institutions) by type of creditor as of the dates indicated.

Government External Debt by Type of Creditor As of June As of December 31, 30, 2014 2015 2016 2017 2018 2019 Multilateral creditors 458.4 493.0 630.2 636.8 618.7 610.3 Bilateral creditors 320.4 303.5 269.5 344.2 411.4 461.8 Commercial creditors 31.8 80.2 525.7 701.7 685.3 689.0 Undisbursed amounts and non-called guarantees(1) 278.2 338.3 N/A N/A N/A N/A Total external debt 1,088.8 1,215.0 1,425.4 1,682.7 1,715.4 1,761.1 ______(1) In accordance with the amendment of the State Debt Act, beginning in 2016, undisbursed amounts and non-called guarantees ceased to be part of the definition of central government debt and are no longer recorded as debt, consistent with international best practices. Note: Data is presented in accordance with the national definitions established by the SDMO. Source: SDMO.

The following table shows the composition of Suriname’s Government external debt by the type of interest rate applicable to such debt as of the dates indicated.

Government External Debt by Type of Interest Rate As of As of December 31, June 30, 2014 2015 2016 2017 2018 2019 Fixed interest rate 278.9 268.1 765.5 931.8 979.0 1,031.2 Floating interest rate 492.9 567.5 637.3 718.6 708.1 701.9 No interest rate 38.8 41.1 22.6 32.3 28.3 28.0 Undisbursed amounts and non- called guarantees(1) 278.2 338.3 N/A N/A N/A N/A Total external debt 1,088.8 1,215.0 1,425.4 1,682.7 1,715.4 1,761.1 ______(1) In accordance with the amendment of the State Debt Act, beginning in 2016, undisbursed amounts and non-called guarantees ceased to be part of the definition of central government debt and are no longer recorded as debt, consistent with international best practices. Note: Data is presented in accordance with the national definitions established by the State Debt Act. Source: SDMO.

89 The following table sets forth by currency the percentage of the Surinamese Government’s external debt to its total central government external indebtedness as of the dates indicated.

Government External Debt by Currency As of As of December 31, June 30, 2014 2015 2016 2017 2018 2019 (as a percentage of total) U.S. dollar 77.1 79.2 86.7 82.5 81.2 79.9 Euro 10.1 8.6 6.6 8.0 6.9 6.9 Other 12.8 12.2 6.7 9.5 11.9 13.2 Total 100.0 100.0 100.0 100.0 100.0 100.0 ______Note: Data excludes undisbursed amounts and non-called guarantees. Source: SDMO.

The following table sets forth debt service of Suriname’s Government external debt service for the periods indicated.

Government External Debt Service For the Six Months Ended For the Year Ended December 31, June 30, 2014 2015 2016 2017 2018 2019* (US$ millions) Principal payments on external debt 33.8 34.9 179.3 53.7 139.7 34.9 Interest payments on external debt 15.8 17.5 24.0 77.6 87.6 44.2 Fees, interest escrows and other costs 1.3 1.2 23.1 3.5 3.7 1.3 Total debt service on external debt 50.9 53.6 226.4 134.8 231.0 80.4

______* Preliminary sub-annual data on a cumulative basis. Source: SDMO.

The following table sets forth scheduled debt service of the Surinamese Government’s total pro forma external debt as of the dates indicated.

Government External Debt Principal and Interest Repayment Schedule(1) As of December 31, 2019 2020 2021 2022 2023 2024 2025 (US$ millions) Principal 96.8 116.9 129.6 122.3 134.1 138.4 140.4 Interest 93.0 108.8 114.6 112.2 110.5 109.4 105.7 Total debt service on external debt 225.7 244.2 234.5 244.6 247.8 246.1 225.7 ______(1) Debt service projections assume issuance of Notes in total principal amount of US$150 million due in 2019 or later with an interest rate of 9% per annum. The actual details of the Notes issued may be different. Source: SDMO.

Domestic Debt

Domestic debt is composed mostly of debt owed to the CBvS and T-bills held by commercial banks and non- bank institutions. Government also has debt owed to domestic suppliers, consisting of loans from contractors for the construction and maintenance of road infrastructure. All domestic debt owed to the CBvS and most on T-bills is

90 denominated in SRD, while most suppliers’ loans are denominated in U.S. dollars. All debt bears interest rates at fixed rates.

Suriname’s public domestic debt amounted to US$775.6 million as of year-end 2018. Roughly 40% was owed to the CBvS in the form of a long-term loan.

The following table sets forth the composition of Government domestic debt as of the dates indicated.

Government Domestic Debt(1) As of As of December 31, June 30, 2014 2015 2016 2017 2018* 2019* (US$ millions) CBvS 188,9 745,8 602.7 314.0 311.6 400.7 Overdraft 159.9 - - - - 89.1 Advances and consolidated debt 29.0 745.8 602.7 314.0 311.6 311.6 Treasury bills 287.6 226.3 213.6 255.7 341.6 353.4 Supplier’s loans 55.2 71.1 65.3 52.0 57.5 53.2 Other domestic debt 31.5 29.4 58.3 98.7 64.9 157.1 Undisbursed amounts and non- called guarantees(2) 63.0 65.0 N/A N/A N/A N/A Total 626.2 1,137.6 939.9 720.4 775.6 964.4 ______(1) Data calculated in accordance with the national definitions established by the SDMO. Data through 2015 includes amounts of contracted debt yet to be drawn and non-called guarantees. In accordance with the State Debt Act, exchange rates used to convert foreign currency debt to SRD and vice versa are exchange rates quoted by the CBvS as at the last banking day of the calendar year to which the nominal GDP as published by the General Bureau of Statistics refers. (2) Beginning in 2016, undisbursed amounts and non-called guarantees ceased to be part of the definition of central government debt and are no longer recorded as debt, consistent with international best practices. * Preliminary sub-annual data on a cumulative basis. Source: SDMO.

The following table sets forth by currency the percentage of Suriname’s Government domestic debt to its total public internal indebtedness as of the dates indicated.

Currency of Government Domestic Debt(1) As of As of December 31, June 30, 2014 2015 2016 2017 2018 2019 (as a percentage of total) SRD 87.8 95.4 87.3 76.7 69.9 65.6 Other 12.2 4.6 12.7 23.3 30.1 34.4 Total domestic debt 100.0 100.0 100.0 100.0 100.0 100.0 ______(1) Data calculated in accordance with the national definitions established by the SDMO, but excluding undisbursed amounts and non- called guarantees. Source: SDMO.

Relationships with International Financial Institutions

IMF

Suriname has been an IMF member since 1978 and receives technical assistance from the IMF on matters such as exchange rate policy, statistics gathering and publication, and fiscal projections, budget preparation capacity, bank and other financial system regulation, taxation and monetary policy. The Republic engages in yearly consultations with the IMF in accordance with Article IV of the IMF Articles of Agreement, with the last IMF report having been issued in December 2018. Suriname has a quota of SDR 128.9 million (approximately US$182 million).

91 On May 27, 2016, the Executive Board of the IMF approved a 24-month SBA, in an amount of SDR 342 million (approximately US$478 million), to support the Government’s economic reform program. The program was aimed at facilitating Suriname’s adjustment to the fall in the prices of major commodity exports, restore confidence, and pave the way to economic recovery. A critical initial element of the program is fiscal consolidation, to restore fiscal and external current account stability, and a steady rebuilding of foreign reserves. The program also included medium-term support for the Government’s reforms to the exchange rate and monetary policy framework, to enhance Suriname’s resilience to commodity price or other export-related shocks. It contained a comprehensive set of structural reforms to support private-sector led growth. On December 19, 2016 the Executive Board of the IMF concluded the Article IV consultation with Suriname. In view of the sharp improvement in the current account of the balance of payments, which recorded a surplus in the fourth quarter of 2016 and throughout 2017, the Government decided not to pursue the SBA further. See “The Surinamese Economy—Economic Policies and Reforms.”

Since 2017, The IMF has visited Suriname twice-yearly for their annual Art. IV consultations. The last visit was completed on October 9, 2019. In addition, the IMF has been active providing technical assistance in the areas of tax implementation and tax administration for the implementation of the VAT, and has provided technical assistance to the Ministry of Finance to modify the data publications to be in conformity with GFS standards and GDDS standards. The IMF has also provided technical assistance to the CBvS to modernize the monetary policy instruments available to the CBvS.

IDB

The Inter-American Development Bank (IDB) is the major multilateral lender currently operating in Suriname. As of June 30, 2019, 29.5% of all external debt of Suriname is owed to the IDB, making it the largest multilateral lender. Through the IDB Country Strategy with Suriname for 2011-2015 and its follow-up agreement, the Government expanded its partnership for development with the IDB. Since 2016, the IDB is focusing on program and project support for the Government’s economic reform program. This includes in particular support for tax administration for which the IDB provided an ongoing US$40 million project loan, health, private sector development and natural resources and environmental management.

World Bank Group

The World Bank Group, which includes the IFC and the International Bank for Reconstruction and Development (IBRD), re-engaged with the Republic after a 30-year hiatus and worked with the Government to develop an Interim Strategy Note that was adopted in 2011. In September 2011, Suriname became the 183rd member of the IFC and the 14th member of IFC in the Latin America region. At the request of the Government, the World Bank Group conducted, in conjunction with the IMF, an Auditing and Accounting Report on the Observance of Standards and Codes and supported activities to facilitate Suriname obtaining candidate status in the EITI. Suriname has already joined the World Bank’s Forest Carbon Partnership Facility, in particular as Suriname is considered by the World Bank as the “most forested country” in the world. The Government and the World Bank have agreed that World Bank support will focus on technical assistance aimed at institutional strengthening and capacity building for the Government. Technical assistance currently includes support of public finance management reform and an increased focus on competitiveness and the ease of doing business, for which the World Bank and the Government are preparing program and project program loans amounting to US$100 million. In April 2019, Suriname entered into a US$35 million loan agreement with the IBRD to finance the dredging of the Saramacca waterway, although no drawdowns under this agreement have been made to date.

92 DESCRIPTION OF THE NOTES

The Republic will issue the Notes under an indenture, to be dated as of December 20, 2019, between the Republic and Wilmington Trust, National Association, as trustee, paying agent, registrar and transfer agent (the “Indenture”).

This section of the Offering Memorandum is intended to be a summary of the material provisions of the Indenture, the Notes, the Accounts Agreement and the Escrow Agreement. This summary is qualified in its entirety, by reference to all of the provisions of the Indenture, the Notes, the Accounts Agreement and the Escrow Agreement. The definitions of certain capitalized terms used in this section are set forth under “—Certain Definitions.”

The Notes contain provisions regarding acceleration and voting on amendments, modifications and waivers that differ from the provisions governing notes issued by certain other issuers. These provisions are commonly referred to as “collective action clauses.” Under these provisions, the Republic may amend certain key terms of the Notes, including the maturity date, amounts payable and other payment terms, with the consent of fewer than all the holders of the Notes. These collective action clauses are described more fully below.

Principal, Maturity and Interest

The Notes will be limited to the aggregate principal amount of US$125,000,000. The Republic will issue Notes in minimum denominations of US$200,000 and integral multiples of US$1,000 in excess thereof.

Principal of the Notes will be repaid in eight semi-annual installments commencing on June 30, 2020, with a final maturity on December 30, 2023. On each Notes Payment Date, the Republic will make a principal repayment equal to the Scheduled Amortization Amount applicable to such Notes Payment Date, and, in addition to payment of the Scheduled Amortization Amount due on such Notes Payment Date, the Republic shall also repay a portion of principal on the Notes equal to the Excess Amount applicable to such Notes Payment Date (provided that such amount will be adjusted to a minimum denomination of at least US$200,000 or an integral multiple of US$1,000 in excess thereof). No later than ten days prior to each Notes Payment Date, the Republic will provide notice to the holders of the Notes (including, if and so long as the Notes are listed on the Luxembourg Stock Exchange, publication in a daily newspaper having general circulation in Luxembourg or on the website of the Luxembourg Stock Exchange at www.bourse.lu and provided to the Luxembourg Stock Exchange), with copies to the Account Bank and the Trustee, specifying the amount of interest and the total amount of principal of the Notes to be repaid on such Notes Payment Date.

Interest on the Notes will accrue at the rate of 9.875% per annum and will be payable semi-annually in arrears on each Notes Payment Date, commencing on June 30, 2020. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. The redemption of Notes with unpaid and accrued interest to the date of redemption will not affect the right of holders of record on a record date to receive interest due on a Notes Payment Date.

Prior to final maturity, payment of principal and interest on each Notes Payment Date will be made to the persons who are registered holders at the close of business on each June 15 and December 15, respectively, immediately preceding the applicable Notes Payment Date. Payment of principal and interest due at final maturity of the Notes (or upon redemption of any Notes) will be payable in U.S. dollars in immediately available funds against surrender of such Notes.

Status of the Notes

The Notes will constitute general, direct, unsecured, unsubordinated and unconditional obligations of the Republic for which the full faith and credit of the Republic is pledged. The Notes will rank without any preference among themselves and equally with all other unsecured and unsubordinated External Indebtedness of the Republic. It is understood that this provision shall not be construed so as to require the Republic to make payments under the Notes ratably with payments being made under any other External Indebtedness.

93 94 Escrow Account

On the Issue Date, the net proceeds from the offering of the Notes will be deposited with the Escrow Agent into the Escrow Account. Funds on deposit in the Escrow Account may be invested in Cash Equivalents (and such investments liquidated) at the written direction of the Republic.

Upon receipt by the Escrow Agent of a duly completed withdrawal certificate substantially in the form of the withdrawal certificate to be attached to the Escrow Agreement and signed on behalf of the Republic and Suralco certifying that the Afobaka Transfer has occurred, (i) a specified amount of the funds on deposit in the Escrow Account will be paid to, or at the written direction of, Suralco and (ii) the balance of the funds remaining in the Escrow Account, if any, will be distributed to the Republic at its written direction.

Neither the Escrow Account nor the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited in the Escrow Account will constitute collateral securing the Notes.

Mandatory Redemption

Dam Transfer Mandatory Redemption

If a duly completed and signed withdrawal certificate in relation to the Escrow Account certifying that the Afobaka Transfer has occurred has not been delivered to the Escrow Agent on or prior to the date that is 90 days after the Issue Date (the “Afobaka Transfer Deadline”), then the Republic will be obligated to redeem the Notes (a “Dam Transfer Mandatory Redemption”) in full at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to (but excluding) the date of redemption (the “Mandatory Redemption Price”). If the Republic is required to make a Dam Transfer Mandatory Redemption, the funds on deposit in the Escrow Account will only be released pursuant to an instruction from the Republic to the Escrow Agent to deliver such funds to the Trustee to be held for the benefit of holders of the Notes as part of the Mandatory Redemption Price.

In the case of a Dam Transfer Mandatory Redemption, no later than 30 days following the Afobaka Transfer Deadline, the Republic will mail, or deliver electronically in accordance with the procedures of DTC, a notice to each holder of Notes with a copy to the Trustee stating:

(1) that a duly completed and signed withdrawal certificate in relation to the Escrow Account has not been delivered to the Escrow Agent on or prior to the Afobaka Transfer Deadline and that the Notes are being redeemed in full at a price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest to (but excluding) the date of redemption; and

(2) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Dam Transfer Mandatory Redemption Date”).

On the Dam Transfer Mandatory Redemption Date, interest shall cease to accrue on the Notes so long as the Republic has deposited with the paying agent funds sufficient to pay the Mandatory Redemption Price in full.

If the Republic is required to make a Dam Transfer Mandatory Redemption pursuant to this provision, the Republic may not have available funds sufficient to pay the full Mandatory Redemption Price.

Liquidity Event Mandatory Redemption

If a Liquidity Event occurs, the Republic shall redeem the Notes (a “Liquidity Event Mandatory Redemption”) at the Mandatory Redemption Price with the aggregate net proceeds of such Liquidity Event.

Upon a Liquidity Event Mandatory Redemption, no later than 30 days following the applicable Liquidity Event, the Republic will mail, or deliver electronically in accordance with the procedures of DTC, a notice to each holder of notes with a copy to the Trustee stating:

95 (1) that a Liquidity Event has occurred and specifying the aggregate principal amount of the Notes to be redeemed; and

(2) the redemption date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed) (the “Liquidity Event Mandatory Redemption Date”).

On the Liquidity Event Mandatory Redemption Date, the Republic shall redeem that portion of the Notes specified in the relevant redemption notice at the Mandatory Redemption Price.

Accounts Agreement

On the Issue Date, the Republic will enter into the Accounts Agreement, under which the Account Bank will establish and maintain the Accounts. The Republic will be required under the Indenture to comply with the terms of the Accounts Agreement. None of the Accounts nor the Republic’s rights therein will be pledged as security for the Notes and none of the funds deposited in the Accounts will constitute collateral securing the Notes.

Accounts

The Accounts Agreement will provide for the establishment and maintenance by the Account Bank of the following accounts located outside the Republic for the deposit of U.S. dollars only:

 a collection account (the “Collection Account”);

 a debt service account for the Notes (the “Notes Debt Service Account”);

 a debt service account for the 2026 Notes (the “2026 Notes Debt Service Account” and, together with the Notes Debt Service Account, the “Debt Service Accounts”); and

 an additional amortization account for the Notes (the “Additional Amortization Account”).

Funds on deposit in the Accounts may be invested in Cash Equivalents (and such investments liquidated) at the written direction of the Republic.

The Account Bank shall provide within 10 Business Days following the end of each calendar quarter, to the Republic, with a copy to the Trustee and the 2026 Notes Trustee, a statement detailing the amount on deposit in each Account as of the end of such quarter and including an itemized list of all deposits and withdrawals from each Account during such calendar quarter, and the Republic will mail or deliver electronically in accordance with the procedures of DTC such statement to the holders of the Notes.

Collection Account

The Indenture will require the Republic to ensure that all dividends paid to the Republic by Staatsolie will be paid in U.S. dollars into the Collection Account. In addition, in order to satisfy the Cash Flow Condition under the Indenture, the Republic must obtain (i) the agreement of each IAMGOLD Joint Venture to make all royalty payments owed to the Republic by such IAMGOLD Joint Venture under any Mineral Agreement in U.S. dollars directly to the Collection Account, and (ii) the agreement of each IAMGOLD Joint Venture to make all payments owed to the Republic or EBS (or to any other state-owned entity of the Republic) by such IAMGOLD Joint Venture pursuant to any Power Purchase Agreement in U.S. dollars directly to the Collection Account.

For so long as the Cash Flow Condition has not been satisfied, the Republic will be required under the Indenture to deposit all royalties received pursuant to a Mineral Agreement and all payments for power received by it or any relevant entity controlled by the Republic pursuant to Power Purchase Agreements into the Collection Account in U.S. dollars. Neither the Account Bank nor the Trustee shall have any obligation to monitor or confirm whether the Cash Flow Condition has been satisfied.

96 Priority of Payments

On each Transfer Instruction Date, the Republic will deliver a Transfer Certificate to the Account Bank instructing the Account Bank to transfer the stated amounts in the Transfer Certificate from the funds then on deposit in the Collection Account in the following order of priority:

 first, to pay fees and expenses, if any, of the Account Bank, the Trustee and the 2026 Notes Trustee; and

 second, (A) if the Transfer Instruction Date to which such Transfer Certificate relates is immediately prior to a 2026 Notes Payment Date, (i) first, to the 2026 Notes Debt Service Account until the amount on deposit in the 2026 Notes Debt Service Account is equal to the 2026 Notes Debt Service Requirement payable on such 2026 Notes Payment Date, then (ii) second, to the Notes Debt Service Account until the amount on deposit in the Notes Debt Service Account is equal to the Notes Debt Service Requirement on the next Notes Payment Date, then (iii) third, to the Additional Amortization Account, and (B) if the Transfer Instruction Date to which such Transfer Certificate relates is immediately prior to a Notes Payment Date, (i) first, to the Notes Debt Service Account until the amount on deposit in the Notes Debt Service Account is equal to the Notes Debt Service Requirement payable on such Notes Payment Date, then (ii) second, to the 2026 Notes Debt Service Account until the amount on deposit in the 2026 Notes Debt Service Account is equal to the 2026 Notes Debt Service Requirement on the next 2026 Notes Payment Date (all in accordance with such Transfer Certificate).

Funds not transferred pursuant to the foregoing order of priority will be retained in the Collection Account until the next succeeding Transfer Instruction Date, after which such amounts will be applied in the above order of priority. Funds in the Collection Account may be invested in Cash Equivalents (and such investments liquidated to effect the transfers referred to above) all at the written direction of the Republic. If, prior to any Payment Date, the Republic determines that the combined funds on deposit in the Collection Account and the applicable Debt Service Account will not be sufficient to pay the Notes Debt Service Requirement or the 2026 Notes Debt Service Requirement payable on such Payment Date, as applicable, the Republic will transfer additional funds to the Collection Account so that the full payment due on such Payment Date can be made.

Payment of Interest and Principal

The Republic will instruct the Account Bank in writing no earlier than five Business Days nor less than three Business Days prior to any Payment Date to transfer amounts in the applicable Debt Service Account to the Trustee or the 2026 Notes Trustee, as applicable, or the respective paying agents for the Notes or the 2026 Notes (as applicable), in order to make payment of the Notes Debt Service Requirement or 2026 Notes Debt Service Requirement, as applicable, payable on such Payment Date. If the Republic determines that the amount on deposit in the applicable Debt Service Account as of any Payment Date will be less than the Notes Debt Service Requirement (in the case of the Notes) or the 2026 Notes Debt Service Requirement (in the case of the 2026 Notes) payable on such Payment Date, the Republic will instruct the Account Bank in writing no earlier than five Business Days nor less than three Business Days prior to such Payment Date to liquidate and Cash Equivalents necessary and to transfer an amount (if available) from the Collection Account to such Debt Service Account equal to the difference between the amount on deposit in such Debt Service Account and the Notes Debt Service Requirement or the 2026 Notes Debt Service Requirement, as applicable, for such Payment Date. If the amount then on deposit in the Collection Account is not sufficient to satisfy such difference, then the Republic will transfer additional funds to the Collection Account in order to make up such deficiency. In addition, the Republic will instruct the Account Bank no less than three Business Days prior to any Notes Payment Date or other applicable redemption date, to transfer the Excess Amount, if any, applicable to such Notes Payment Date or other applicable redemption date, from the Additional Amortization Account to the Trustee, or the paying agent for the Notes, in order to make an additional repayment of principal of the Notes on such Notes Payment Date or other applicable redemption date.

97 Additional Interest

The Indenture will provide that if the Republic fails to fully satisfy the Cash Flow Condition on or prior to the date that is 90 days after the Issue Date (a “Payment Instruction Failure”), the interest rate on the Notes shall be increased by 3.0% per annum. Following a cure of the Payment Instruction Failure, the interest rate on the Notes will be reduced to the original interest rate applicable to the Notes as of the Issue Date. The Republic shall provide prompt written notice to the Trustee of the satisfaction of the Cash Flow Condition, a Payment Instruction Failure or a cure of a Payment Instruction Failure and mail or deliver electronically in accordance with the procedures of DTC (with a copy to the Trustee) notice of the new rate and effective date of any change in the interest rate on the Notes.

Optional Redemption

At any time prior to June 30, 2020, the Republic may redeem the Notes, in whole or in part, at any time and from time to time, at the Republic’s option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus the Applicable Premium plus accrued and unpaid interest, if any, to, but excluding, the redemption date.

For purposes of the previous paragraph, the following terms have the following meaning:

“Applicable Premium” means, with respect to any Note at any redemption date, the greater of:

(1) 1.0% of the principal amount of such Note; and

(2) the excess, if any, of (a) the present value at such redemption date of (i) the redemption price of such Note at June 30, 2020 (as described below), plus (ii) all required interest payments due on such Note through June 30, 2020, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points, over (b) the principal amount of such Note.

“Treasury Rate” means, as of any redemption date, the weekly average, rounded to the nearest 1/100th of a percentage point (for the most recently completed week for which such information is available as of the date that is two business days prior to the redemption date), of the yield to maturity as of such redemption date of United States Treasury Securities with a constant maturity (as compiled and published in Federal Reserve Statistical Release H.15 with respect to each applicable day during such week (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from such redemption date to June 30 , 2020; provided, however, that if the period from such redemption date to June 30, 2020 is not equal to the constant maturity of a United States Treasury Security for which such yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yield on actually traded United States Treasury Securities adjusted to a constant maturity of one year.

The Trustee will not be responsible for calculating or verifying the redemption price, Applicable Premium or Treasury Rate.

At any time on or after June 30, 2020 and prior to December 30, 2020, the Issuer may redeem all or part of the Notes at a redemption price (expressed as percentages of their principal amount at maturity) of 104.9375%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. At any time on or after December 30, 2020 and prior to maturity, the Issuer may redeem all or part of the Notes at a redemption price (expressed as percentages of their principal amount at maturity) of 102.4688%, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Any optional redemption by the Republic will be subject to the right of holders of record on the relevant regular record date that is prior to relevant redemption date to receive interest due on the applicable Notes Payment Date.

In connection with any optional redemption hereunder, the Republic will deliver or cause to be delivered, a notice of redemption to each holder at least 30 days and not more than 60 days prior to the redemption date, to the address of each holder as it appears on the register maintained by the registrar. A notice of redemption will specify the redemption date and may provide that it is subject to certain conditions that will be specified in the notice. If those

98 conditions are not met, the redemption notice will be of no effect and the Republic will not be obligated to redeem the Notes.

In the event that fewer than all of the Notes are to be redeemed at any time, selection of Notes for redemption will be made in compliance with the requirements governing redemptions of the principal securities exchange, if any, on which the Notes are listed or if such securities exchange has no requirement governing redemption or if the Notes are not then listed on a securities exchange, by lot (or, in the case of Notes held in global form, in accordance with the applicable procedures of DTC). If the Notes are redeemed in part, the remaining outstanding amount of any Note must be at least equal to US$200,000 and be an integral multiple of US$1,000.

Unless the Republic defaults in the payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes called for redemption.

Certain Covenants of the Republic

Negative Pledge. So long as any Note remains outstanding (as defined in the Indenture), the Republic will not create or permit to exist any Lien on the whole or any part of its present or future revenues, properties or assets to secure the Public External Indebtedness of any person unless, at the same time or prior thereto, the Republic creates a Lien on the same terms for its obligations under the Notes. Notwithstanding the foregoing, the Republic may create or allow to exist the following Liens (each a “Permitted Lien”):

 any Lien upon property or assets (including capital stock of any person) to secure Public External Indebtedness incurred for the purpose of financing the acquisition of the property or assets over which such Lien has been created and any renewal or extension of any such Lien which is limited to the original property or assets covered thereby and which secures only the renewal or extension of the original secured financing;

 any Lien existing in respect of an asset at the time of its acquisition and any renewal or extension of any such Lien which is limited to the original asset covered thereby and which secures only the renewal or extension of the original secured financing;

 any Lien in existence on the date of the Indenture, including any renewal or extension thereof which secures only the renewal or extension of the original secured financing;

 any Lien securing Public External Indebtedness incurred for the purpose of financing all or part of the costs of the acquisition, construction or development of a project and any renewal or extension of any such Lien; provided that (a) the holders of such Public External Indebtedness agree to limit their recourse to the assets and revenues of such project as the principal source of repayment of such Public External Indebtedness and (b) the property over which such Lien is granted consists solely of such assets and revenues or claims that arise from the operation, failure to meet specifications, failure to complete, exploitation, sale or loss of, or damage to, such assets; and

 Liens in addition to those permitted above, and any renewal or extension thereof; provided that at any time the aggregate amount of Public External Indebtedness secured by such additional Liens shall not exceed the equivalent of US$10,000,000.

Maintenance of Approvals. The Republic will (i) obtain and maintain in full force and effect all approvals, authorizations, permits, consents, exemptions and licenses and will take all other actions (including any notice to, or filing or registration with, any agency, department, ministry, authority, statutory corporation or other regulatory or administrative body or juridical entity of the Republic) which are necessary for the continued validity and enforceability of the Indenture and the Notes, and (ii) take all necessary and appropriate governmental and administrative action in order for the Republic to be able to make all payments to be made by it under the Notes.

Transfer of EBS Generation Assets. The Republic will procure that legal title to the EBS Generation Assets is transferred by EBS to an Eligible Transferee on or prior to the date that is 12 months after the Issue Date.

99 Staatsolie Dividends. The Republic will take all action and issue all authorizations, as stockholder or otherwise, necessary to cause Staatsolie to declare and pay (in each case without deductions, offsetting or settlements against any liabilities of the Republic owed to Staatsolie) the maximum amount of dividends permitted by applicable law promptly after legally permitted to do so, subject to the limitations contained in the Staatsolie Credit Agreement limiting such dividends to no more than 50% of Staastolie’s Consolidated Net Income (as defined in the Staatsolie Credit Agreement), and to pay such dividends in U.S. dollars directly into the Collection Account.

Quarterly Investor Conference Calls. The Republic will host a quarterly conference call for holders of the Notes to be held on or about the 15th Business Day of each January, April, July and October, make representatives from the Ministry of Finance available for such calls, and afford holders an opportunity to ask questions. The time and dial-in details for each quarterly conference call will be delivered by the Republic to holders of the Notes in accordance with the procedures in the Indenture and will be posted prominently by the Republic on the website of the Government of Suriname (at www.gov.sr) at least 72 hours in advance of such conference call.

Maintenance of IAMGOLD JV Agreements. The Republic will, and will cause each Republic-controlled entity that is a party to any IAMGOLD JV to, maintain and enforce its rights under the agreements governing each of the IAMGOLD JVs.

Maintenance of Accounts Agreement. The Republic will maintain, without amendment or modification, the Accounts Agreement and will observe all of its obligations thereunder.

Listing. The Republic will use its reasonable best efforts to list the Notes, and thereafter to maintain the listing of the Notes, on the Official List of the Luxembourg Stock Exchange.

Events of Default

Each of the following events will constitute an event of default under the Notes:

Non-Payment:

 The Republic fails to pay principal on any Notes when due and such failure continues for a period of 10 calendar days; or

 The Republic fails to pay interest on any Notes when due and such failure continues for a period of 30 calendar days;

Breach of Other Obligations: The Republic fails to perform any other obligation under the Notes or the Indenture, and such failure continues for a period of 60 calendar days after written notice requiring the same to be remedied shall have been given to the Republic by the trustee or by the holders (with a copy to the trustee) of at least 25% in the aggregate principal amount of the outstanding Notes;

Cross Default: The Republic fails to make any payment in respect of any Public External Indebtedness in an aggregate principal amount in excess of US$15,000,000 (or its equivalent in any other currency) when payable (whether upon maturity, acceleration or otherwise, as such time may be extended by any applicable grace period or waiver) and such failure continues for a period of 30 calendar days after written notice requiring the same to be remedied shall have been given to the Republic by the trustee or by the holders (with a copy to the trustee) of at least 25% in the aggregate principal amount of the outstanding Notes;

Moratorium: The Republic, or a court of proper jurisdiction, declares a moratorium with respect to the payment of principal of or interest on Public External Indebtedness, which moratorium does not expressly exclude the Notes;

100 Validity: Any of the following occurs:

 the Republic contests the validity or enforceability of the Notes or the Accounts Agreement in a formal administrative, legislative or judicial proceeding;

 any legislative, executive or judicial body or official of the Republic which is authorized in each case by law to do so declares the Notes or the Accounts Agreement invalid or unenforceable;

 the Republic shall deny any of its obligations under the Notes or the Accounts Agreement;

 any constitutional provision, treaty, convention, law, regulation, official communiqué, decree, ordinance or policy of the Republic, or any final decision by any court in the Republic purports to render any material provision of the Indenture, the Accounts Agreement or the Notes invalid or unenforceable or purports to prevent or delay the performance or observance by the Republic of any of its material obligations thereunder; or

 any constitutional provision, treaty, convention, law, regulation, ordinance, decree, consent, approval, license or other authority necessary to enable the Republic to make or perform its material obligations under the Indenture, the Accounts Agreement or the Notes, or the validity or enforceability thereof, shall expire, be withheld, revoked, terminated or otherwise cease to remain in full force and effect, or shall be modified in a manner which adversely affects any rights or claims of any of the holders of the Notes;

IMF Membership. The Republic fails to maintain its membership in, and eligibility to use the general resources of, the International Monetary Fund (the “IMF”); or

Judgments. There shall have been entered against the Republic in a matter related to External Indebtedness (i) a final judgment, decree or order by a court of competent jurisdiction or (ii) an arbitral award by a tribunal of competent jurisdiction, in each case from which no appeal may be made, or is made within the time limit for doing so, for the payment of money in excess of US$15,000,000 (or its equivalent in another currency) and 120 days shall have passed since the entry of such order without the Republic having satisfied such judgment or award.

If any of the events of default described above occurs and is continuing, the trustee or the holders of at least 25% of the aggregate principal amount of the Notes then outstanding, so long as such event of default is continuing, may by written demand to the Republic (with a copy to the trustee, if notice is given by the holders) declare the principal of and any accrued interest on the Notes to be immediately due and payable. Upon any declaration of acceleration, the principal, interest and all other amounts payable on the Notes will become immediately due and payable, unless prior to receipt of such demand by the Republic all such defaults shall have been cured. The holders of more than 50% of the aggregate principal amount of the outstanding Notes may rescind or annul a declaration of acceleration on behalf of all holders of Notes if:

 following the declaration that the Notes are immediately due and payable, the Republic deposits with the trustee a sum sufficient to pay all overdue principal, interest and other amounts in respect of the Notes, as well as the reasonable fees, disbursements and expenses of the trustee and its agents and counsel; and

 all other events of default (other than non-payment of principal that became due by virtue of the acceleration upon the event of default) have been remedied.

The trustee shall not be deemed to have notice of any default or Event of Default unless written notice of such default or Event of Default is received by a Responsible Officer of the trustee, and such notice references the Notes and the Indenture.

101 Suits for Enforcement and Limitations on Suits by Holders

If an event of default has occurred and is continuing, the trustee may institute judicial action to enforce the rights of the holders of Notes. With the exception of a suit to enforce the absolute right of a holder to receive payment of the principal of and interest on the Notes in the manner contemplated in the Indenture and the Notes on the stated maturity date therefor (as that date may be amended or modified pursuant to the terms of the Notes, but without giving effect to any acceleration), a holder has no right to bring a suit, action or proceeding with respect to the Notes unless: (1) such holder has given written notice to the trustee that a default with respect to the Notes has occurred and is continuing; (2) holders of at least 25% of the aggregate principal amount of the outstanding Notes have instructed the trustee by specific written request to institute an action or proceeding and provided an indemnity or security satisfactory to the trustee; and (3) 60 days have passed since the trustee received the instruction, the trustee has failed to institute an action or proceeding as directed and no direction inconsistent with such written request shall have been given to the trustee by a majority of holders of the outstanding Notes. Moreover, any such action commenced by a holder must be for the equal, ratable and common benefit of all holders of the Notes.

Modifications, Amendments and Waivers—Collective Action

A meeting of holders of Notes may be called at any time and from time to time to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other action provided by the Indenture or the Notes to be made, given or taken by holders of the Notes or to modify, amend or supplement the terms of the Indenture or the Notes as hereinafter provided.

The Republic or the holders of at least 10% in aggregate principal amount of the outstanding Notes may at any time call a meeting of holders of Notes for any such purpose to be held at such time and at such place as the Republic or such holders shall determine. Notice of every such meeting, setting forth the time and the place of such meeting and in reasonable detail the action proposed to be taken at such meeting, shall be given as provided in the Indenture, not less than 30 nor more than 60 calendar days prior to the date fixed for the meeting.

If the Republic or the holders of at least 10% in aggregate principal amount of the outstanding Notes request that the trustee call a meeting of the holders of the Notes for any such purpose, by written request (with a copy to the Republic, in the case of request by such holders) setting forth the time and place of, and in reasonable detail the action proposed to be taken at, the meeting, the trustee shall call such meeting for such purposes by giving notice thereof as provided in the Indenture.

Only holders and their proxies are entitled to vote at a meeting of holders. The Republic will set the procedures governing the conduct of the meeting and, if additional procedures are required, the Republic in consultation with the trustee will establish such procedures as are customary in the market.

Modifications, amendments and waivers may also be approved by holders of Notes pursuant to written action with the consent of the requisite percentage of holder of Notes. The Republic will solicit the consent of the relevant holders to the modification, amendment or waiver not less than 10 and not more than 30 calendar days before the expiration date for the receipt of such consents as specified in such solicitation.

The holders may generally approve any proposal by the Republic to modify the terms of the Indenture or the terms of the Notes with the affirmative vote (if approved at a meeting of the holders) or consent (if approved by written action) of holders of more than 50% of the aggregate principal amount of the outstanding Notes.

However, holders may approve by vote or written consent, through one of three modification methods (as described below), any proposed modification by the Republic that would do any of the following (such subjects referred to as “reserved matters”):

 change the date on which any amount is payable on the Notes;

 reduce the principal amount of the Notes;

102  reduce the interest rate on the Notes;

 change the method used to calculate any amount payable on the Notes;

 change the currency or place of payment of any amount payable on the Notes;

 amend, change or modify in any material respect the obligation of the Republic to make and consummate a mandatory redemption;

 modify the Republic’s obligation to make any other payments on the Notes (including any redemption price therefor);

 change the identity of the obligor under the Notes;

 change the definition of “outstanding debt securities” or the percentage of affirmative votes or written consents, as the case may be, required to vote on a modification, amendment or waiver of a “reserved matter”;

 change the definition of “uniformly applicable” or “reserved matter”;

 authorize the trustee, on behalf of all holders of the Notes, to exchange or substitute all the Notes for, or convert all the Notes into, other obligations or securities of the Republic or any other person; or

 change the legal ranking, governing law, submission to jurisdiction or waiver of immunities provisions of the Indenture or the Notes.

A change to a reserved matter, including the payment terms of the Notes, can be made without the consent of all holders of the Notes, as long as the change is approved, pursuant to one of the three following modification methods, by vote or written consent by:

 the holders of more than 75% of the aggregate principal amount of the outstanding debt securities of a series affected by the proposed modification;

 where such proposed modification would affect the outstanding debt securities of two or more series, the holders of more than 75% of the aggregate principal amount of the outstanding debt securities of all of the series affected by the proposed modification, taken in the aggregate, if certain “uniformly applicable” requirements are met; or

 where such proposed modification would affect the outstanding debt securities of two or more series, the holders of more than 66 2/3% of the aggregate principal amount of the outstanding debt securities of all of the series affected by the proposed modification, taken in the aggregate, and the holders of more than 50% of the aggregate principal amount of the outstanding debt securities of each series affected by the modification, taken individually.

“uniformly applicable,” as referred to above, means a modification by which holders of debt securities of any series affected by that modification are invited to exchange, convert or substitute their debt securities on the same terms for (x) the same new instruments or other consideration or (y) new instruments or other consideration from an identical menu of instruments or other consideration. The trustee shall not be responsible for determining whether the uniformly applicable requirement has been satisfied.

The Republic may select, in its discretion, any modification method for a reserved matter in accordance with the Indenture and designate which series of debt securities will be included in the aggregate for approval of modifications affecting two or more series of debt securities. Any selection of a modification method or designation

103 of series to be included will be final for the purpose of the vote or written consent solicitation related to such modification request.

Before soliciting any vote or written consent of any holder of debt securities for any modification, amendment or waiver in respect to a reserved matter, the Republic will provide the following information to the holders of debt securities of any series that would be affected by the proposed modification, amendment or waiver:

 a description of the Republic’s economic and financial circumstances that are in the Republic’s opinion relevant to the request for the proposed modification, amendment or waiver, a description of the Republic’s existing debts and its broad policy reform program and provisional macroeconomic outlook;

 if the Republic shall at the time have entered into an arrangement for financial assistance with multilateral and/or other major creditors or creditor groups and/or an agreement with any such creditors regarding debt relief, (x) a description of any such arrangement or agreement and (y) where permitted under the information disclosure policies of the multilateral or other creditors, as applicable, a copy of the arrangement or agreement;

 a description of the Republic’s proposed treatment of external debt securities that are not affected by the proposed modification, amendment or waiver and its intentions with respect to any other major creditor groups; and

 if the Republic is then seeking any reserved matter modification affecting any other series of debt securities, a description of that proposed modification.

For purposes of determining whether the required percentage of holders of the debt securities of a series has approved any modification, amendment or waiver of the debt securities or the Indenture, or whether the required percentage of holders has delivered a notice of acceleration of the debt securities of that series, debt securities will be disregarded and deemed not to be outstanding and may not be counted in a vote or consent solicitation for or against a proposed modification, amendment or waiver if on the record date for the proposed modification, amendment or waiver or other action or instruction under the Indenture, the debt security is held by the Republic or by a public sector instrumentality, or by a corporation, trust or other legal entity that is controlled by the Republic or a public sector instrumentality, except that (x) debt securities held by the Republic or any public sector instrumentality of the Republic or by a corporation, trust or other legal entity that is controlled by the Republic or a public sector instrumentality which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the trustee the pledgee’s right so to act with respect to such debt securities and that the pledgee is not the Republic or a public sector instrumentality, and in case of a dispute concerning such right, the advice of counsel shall be full protection in respect of any decision made by the trustee in accordance with such advice; and (y) in determining whether the trustee will be protected in relying upon any such action or instructions under the Indenture, or any notice from holders, only debt securities that a responsible officer of the trustee has been notified in writing to be so owned or controlled will be so disregarded.

As used in the preceding paragraph, “public sector instrumentality” means the Central Bank, any department, ministry or agency of the government of the Republic or any corporation, trust, financial institution or other entity owned or controlled by the government of the Republic or any of the foregoing, and “control” means the power, directly or indirectly, through the ownership of the voting securities or other ownership interests, by contract or otherwise, to direct the management of or elect or appoint a majority of the board of directors or other persons performing similar functions in lieu of, or in addition to, the board of directors of a corporation, trust, financial institution or other entity.

104 Certain Amendments Not Requiring Holder Consent

The Republic and the trustee may, without the vote or consent of any holder of Notes, modify, amend or supplement the Indenture or the Notes for the purpose of:

 adding to the covenants of the Republic for the benefit of the holders of Notes;

 surrendering any rights or power conferred upon the Republic;

 securing the Notes pursuant to the requirements of the Notes or otherwise;

 curing any ambiguity or curing, correcting or supplementing any defective provision contained in the Indenture or in the Notes;

 amending the Indenture or the Notes in any manner that the Republic may determine and that does not adversely affect the interests of any holder of Notes in any material respect; or

 correcting a manifest error of a formal, minor or technical nature.

Representative Committee

The holders of at least 25% of the outstanding aggregate principal amount of the Notes may, by notice in writing to the Republic (with a copy to the trustee), appoint any persons as a committee (a “Holders’ Committee”) to represent the interests of the holders (as well as the interests of any holders of any other outstanding series of debt securities who wish to be represented by such Holders’ Committee) if any of the following events shall have occurred:

(i) an event of default;

(ii) any event or circumstance which would, with the giving of notice, lapse of time, the issuing of a certificate and/or fulfillment of any other requirement constitute an event of default;

(iii) any public announcement by the Republic to the effect that the Republic is seeking or intends to seek a restructuring of the Notes (whether by amendment, exchange offer or otherwise); or

(iv) with the agreement of the Republic, at a time when the Republic has reasonably reached the conclusion that its debt may no longer be sustainable while the Notes or any other affected series of debt securities are outstanding.

Upon receipt of a written notice that such Holders’ Committee has been appointed in accordance with this section, and a certificate delivered as described below, the Republic shall give notice of the appointment of such Holders’ Committee to all holders of the Notes in accordance with “—Notices” and the holders of each affected series of outstanding debt securities in accordance with the governing instrument for that series of Notes as soon as practicable after such written notice and such certificate are delivered to the Republic.

Any such Holders’ Committee in its discretion may, among other things: (i) engage legal advisors and financial advisors to assist it in representing the interests of the holders of the Notes, (ii) adopt such rules as it considers appropriate regarding its proceedings, (iii) enter into discussions with the Republic and/or other creditors of the Republic, and (iv) designate one or more members of the Holders’ Committee to act as the main point(s) of contact with the Republic and provide all relevant contact details to the Republic. Except to the extent provided in this paragraph, such Holders’ Committee shall not have the ability to exercise any powers or discretions which the holders of the Notes could themselves exercise.

The Republic shall engage with the Holders’ Committee in good faith and provide it with information equivalent to that required under “—Modifications, Amendments and Waivers—Collective Action” and related proposals, if any, in each case as the same become available, subject to any applicable information disclosure policies,

105 rules and regulations. The Republic shall pay any reasonable fees and expenses of any such Holders’ Committee as may be agreed with it (including, without limitation, the fees and expenses of the Holders’ Committee’s legal advisors and financial advisors, if any) within 30 days of the delivery to the Republic of a reasonably detailed invoice and supporting documentation.

Upon the appointment of a Holders’ Committee, the persons constituting the Holders’ Committee (the “Members”) shall deliver a certificate to the Republic and to the trustee signed by authorized representatives of the Members, upon which certificate, the Republic and the trustee may rely. The certificate shall certify (i) that the Holders’ Committee has been appointed, (ii) the identity of the initial Members, and (iii) that such appointment complies with the terms of the Indenture. Promptly after any change in the identity of the Members, a new certificate which each of the Republic and the trustee may rely on, shall be delivered to the Republic and the trustee identifying the new Members. Each of the Republic and the trustee may assume that the membership of such Holders’ Committee has not changed unless and until it shall have received a new certificate. Notwithstanding anything herein to the contrary, in dealing with any Holders’ Committee, the trustee shall not be required to provide such Holders’ Committee with any information that has not otherwise been provided to holders not represented by such Holders’ Committee. In appointing a person or persons as a committee to represent the interests of the holders of the Notes, the holders of the Notes may instruct a representative or representatives of the committee to form a separate committee or to join a steering group with any person or persons appointed for similar purposes by other affected series of outstanding debt securities.

Payments and Agents

Payment on a Notes Payment Date of principal and interest due on the Notes held in global form to be made other than at final maturity will be made to DTC or its nominee as the registered owner thereof in U.S. dollars in immediately available funds. Payment of principal and interest due at final maturity of the Notes (or upon redemption of any Notes) will be payable in U.S. dollars in immediately available funds against surrender of such Notes.

The Republic expects that upon receipt of any payment of principal of or interest on the Notes, DTC will credit the appropriate DTC participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the Notes as shown on the records of DTC. The Republic also expects that payments by DTC participants to owners of beneficial interests in the Notes held in global form through such DTC participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for those customers.

Payments by such DTC participants to owners of beneficial interests in such Notes held in global form through such participants will be the responsibility of such participants, as is now the case with securities held for the accounts of customers registered in “street name.”

Neither the Republic nor the trustee will have any responsibility or liability for any aspect of the records of DTC relating to payments made by DTC on account of beneficial interests in the Notes held in global form or for maintaining, supervising or reviewing any records of DTC relating to such beneficial interests.

If any date for payment in respect of any Note is not a Business Day, the holder thereof shall not be entitled to payment until the next following Business Day. No further interest shall be paid in respect of any such delay in payment.

If the Republic issues Notes in certificated form, payments of principal and interest thereon to be made other than at final maturity will be made to the person in whose name such Note is registered at the close of business on the regular record date (as defined in the terms and conditions of the Notes) immediately preceding the related Notes Payment Date. Payments of principal and interest due at final maturity of the Notes (or upon redemption of any Notes) will be payable upon surrender of such certificated form of the Note. Such payment shall be made by a United States dollar check drawn on a bank located in the United States mailed to the holder at such holder’s registered address or, upon application of any holder of at least US$1,000,000 principal amount of Notes, to the paying agent in the city of its corporate trust office not later than the relevant regular record date, by transfer of immediately available funds to a United States dollar account maintained by such holder with a bank in the City of New York.

106 Subject to any relevant unclaimed property laws, all moneys paid by or on behalf of the Republic to the paying agent for the payments of the principal of or interest on any Note which remain unclaimed at the end of two years after such principal or interest shall have become due and payable will be repaid to the Republic (upon written request therefore), and the holder of such Note may thereafter look only to the Republic for payment. Upon such repayment all liability of the paying agent and any other paying agent with respect thereto shall cease, without, however, limiting in any way the obligation of the Republic in respect of the amount so repaid, subject to the provisions set forth in “—Claims Proscribed” below.

So long as any Note remains outstanding, the Republic will maintain a registrar and paying agent having a specified office in the city of the Trustee’s corporate trust office in the United States.

The Republic has initially appointed Wilmington Trust, National Association, as trustee, registrar, paying agent and transfer agent for the Notes. Subject to the foregoing, the Republic may terminate any such appointment and may appoint any other agents in such other places as it deems appropriate upon notice in accordance with “— Notices” below and in accordance with the terms and conditions set forth in the Indenture.

Payments in respect of the Notes shall be made in such currency of the United States as at the time of payment shall be legal tender for the payment of public and private debts.

In acting under the Indenture and in connection with the Notes, each of the agents and each other paying agent and transfer agent is acting solely as agent of the Republic. The agents do not assume any obligation toward or relationship of agency or trust for or with the owner or holder of any Note, except that they will hold in trust any funds for payment of principal of or interest on the Notes and will apply such funds as set forth in the Indenture and the Notes.

Purchase and Cancellation

The Republic may at any time purchase Notes at any price in the open market or otherwise. The Notes so purchased by the Republic may, at the Republic’s discretion, be held, resold or surrendered to the trustee for cancellation.

Additional Amounts

The Republic shall make all payments on the Notes without withholding or deduction for or on account of any present or future taxes, duties, assessments, or other governmental charges of whatever nature imposed or levied by the Republic, any political subdivision or authority thereof or therein having power to tax or any other jurisdiction (including any political subdivision or authority thereof or therein having power to tax) from or through which payments by or at the direction of the Republic are made (each, a “Taxing Jurisdiction”), unless it is compelled by the laws of such Taxing Jurisdiction to deduct or withhold such taxes, duties, assessments or governmental charges. If any such withholding is required with respect to a Note, the Republic will (i) pay to the relevant Taxing Jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon; (ii) pay such additional amounts as may be necessary to ensure that the net amounts receivable by the holder of the Note after such withholding or deduction shall equal the payment which would have been receivable in respect of the Notes in the absence of such withholding or deduction and (iii) furnish such holder, promptly and in any event within 60 days after such deduction or withholding, the original tax receipt issued by the relevant Taxing Jurisdiction (or if such original tax receipt is not available or must legally be kept in the possession of the Republic, a duly certified copy of the original tax receipt or any other evidence of payment reasonably satisfactory to the relevant holder), together with such other documentary evidence with respect to such payments as may be reasonably requested from time to time by such holder. The Republic will not, however, pay any additional amounts if a holder is subject to withholding or deduction due to one of the following reasons:

 the holder (or a fiduciary, settlor, beneficiary, member or shareholder of the holder, if the holder is an estate, a trust, a partnership or a corporation) has some present or former connection with the relevant Taxing Jurisdiction other than merely holding the Notes, receiving principal or interest thereon or exercising remedies with respect thereto;

107  the holder has failed to comply with any reasonable certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with the relevant Taxing Jurisdiction, of the holder of a Note or any interest therein or rights in respect thereof, if compliance is required by such Taxing Jurisdiction, pursuant to applicable law or any international treaty in effect, as a precondition to exemption from or reduction in such withholding or deduction to which such holder is legally entitled; or

 the holder has failed to present its Note for payment within 30 days after the Republic first makes available a payment of principal or interest on such Note.

If a Taxing Jurisdiction is required by applicable law to make any deduction or withholding of any Tax in respect of which the Republic would be required to pay any additional amount to a holder, but does not make such deduction or withholding with the result that a liability in respect of such Tax is assessed directly against the holder of any Note, and such holder pays such liability, then the Republic will promptly reimburse such holder for such payment (including any related interest or penalties to the extent such interest or penalties arise by virtue of a default or delay by the Republic) upon demand by such holder accompanied by an official receipt (or a duly certified copy thereof) issued by the Taxing Authority.

Whenever there is mentioned, in any context, the payment of the principal of or interest on, or any amounts in respect of, a Note, such mention shall be deemed to include mention of the payment of additional amounts to the extent that, in such context, additional amounts are, were or would be payable in respect thereof, and express mention of the payment of additional amounts (if applicable) shall not be construed as excluding additional amounts where such express mention is not made.

Currency Indemnity

The Republic agrees that if a judgment or order given or made by any court for the payment of any amount in respect of the Indenture or the Notes is expressed in a currency (the “judgment currency”) other than the specified currency, the Republic will indemnify the recipient against any deficiency arising or resulting from any variation in rates of exchange between the date as of which the specified currency is notionally converted into the judgment currency for the purposes of such judgment or order and the date actual payment thereof is received (or could have been received) by converting the amount in the judgment currency into the specified currency promptly after receipt thereof at the prevailing rate of exchange in a foreign exchange market reasonably selected by such recipient. This indemnity will constitute a separate and independent obligation from the other obligations contained in the Indenture and the Notes and will give rise to a separate and independent cause of action.

Claims Proscribed

All claims against the Republic for payment of principal of or interest (including additional amounts) on or in respect of the Notes shall be proscribed unless made within five years from the date on which the relevant payment first became due.

Notices

Notices will be mailed to holders of Notes at their registered addresses and shall be deemed to have been given on the date of such mailing, provided that for so long as the Notes are in book-entry form, notices to holders will be sent in accordance with the applicable procedures of DTC. DTC will communicate such notices to its participants in accordance with its standard practices. In addition, all notices to holders of the Notes will, if and so long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, be published by the Republic in a daily newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) or on the website of the Luxembourg Stock Exchange at www.bourse.lu and be provided by the Republic to the Luxembourg Stock Exchange.

108 No Further Issues

The Indenture will limit the aggregate principal amount of the Notes that may be issued to the amount issued on the Issue Date.

Governing Law and Jurisdiction

The Indenture, the Notes and the Accounts Agreement shall be governed by, and construed in accordance with, the laws of the State of New York; provided, however, that the due authorization and execution of the Indenture, the Notes and the Accounts Agreement by the Republic shall be governed by the laws of the Republic.

To the fullest extent permitted by applicable law:

 the Republic will irrevocably submit to the non-exclusive jurisdiction of any New York State or federal court sitting in the City of New York, and any appellate court from any thereof, in any Related Proceeding (as defined in “Enforcement of Civil Liabilities”);

 the Republic will irrevocably agree that all claims in respect of any Related Proceeding may be heard and determined in such New York State or federal court;

 the Republic will irrevocably waive, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any Related Proceeding and any objection to any Related Proceeding whether on the grounds of venue, residence or domicile;

 the Republic will agree that a final judgment in any Related Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law; and

 the Republic agrees to cause an appearance to be filed on its behalf and to defend itself in connection with any Related Proceeding action instituted against it.

However, a default judgment obtained in the United States against the Republic resulting from the Republic’s failure to appear and defend itself in any suit filed against it, or from the Republic’s deemed absence at the proceedings, may not be enforceable in the Republic.

The Republic will appoint the person for the time being acting as, or discharging the function of, Consul General of the Republic in the City of New York (currently with an office at 633 Third Avenue, 17th Floor, New York, New York 10017), and agrees that for so long as any Note remains outstanding the person from time to time so acting, or discharging such functions, shall be deemed to have been appointed as the Republic’s agent to receive on behalf of the Republic and its property service of copies of the summons and complaint and any other process which may be served in any Related Proceeding in such New York State or federal court sitting in the City of New York. Such service may be made by U.S. registered mail or by delivering by hand a copy of such process to the Republic in care of the process agent at the address specified above for the process agent and such service will be effective ten days after the mailing or delivery by hand of such process to the office of the process agent. The Republic will authorize and direct the process agent to accept on its behalf such service. Failure of the process agent to give notice to the Republic, or failure of the Republic to receive notice, of such service of process shall not affect in any way the validity of such service on the process agent or the Republic.

The Republic will also irrevocably consent to the service of any and all process in any Related Proceeding in a New York State or federal court sitting in the City of New York by sending by U.S. registered mail, copies of such process addressed to the Republic at the Ministry of Finance, and such service will be effective ten days after mailing thereof. The Republic will covenant and agree that it shall take any and all reasonable action that may be necessary to continue the designation of the process agent in full force and effect, and to cause the process agent to continue to act as such. In addition, none of its agreements described in this or the preceding paragraph shall affect the right of any

109 party to serve legal process in any other manner permitted by law or affect the right of any party to bring any suit, action or proceeding against any other party or its property in the courts of other jurisdictions.

To the extent that the Republic has or hereafter may acquire any immunity (sovereign or otherwise) from jurisdiction of any New York State or federal court sitting in the City of New York with respect to a Related Proceeding (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise), the Republic has, to the fullest extent permitted under applicable law, including the Foreign Sovereign Immunities Act, irrevocably waived such immunity in respect of any such Related Proceeding; provided, however, that under the Foreign Sovereign Immunities Act, it may not be possible to enforce in the Republic a United States judgment. The Republic’s consent to service and waiver of sovereign immunity does not extend to actions brought under the United States federal securities laws or any state securities laws.

Certain Definitions

“2026 Notes” means the Republic’s 9.25% Notes due 2026 issued under the 2026 Notes Indenture.

“2026 Notes Debt Service Account” has the meaning ascribed thereto in “—Accounts Agreement— Accounts.”

“2026 Notes Debt Service Requirement” means, as of any date of calculation, the aggregate amount of interest that will become due and payable on the next succeeding 2026 Notes Payment Date for the 2026 Notes.

“2026 Notes Indenture” means the indenture, dated October 19, 2016, among the Republic, Wilmington Trust, National Association, as trustee, principal paying agent, transfer agent and registrar, and Wilmington Trust SP Services (Luxembourg) S.A., as Luxembourg paying agent and Luxembourg transfer agent.

“2026 Notes Payment Date” means each April 26 and October 26 of each year, beginning on April 26, 2020.

“2026 Notes Trustee” means Wilmington Trust, National Association, in its capacity as trustee for the 2026 Notes.

“Account Bank” means Wilmington Trust, National Association, in its capacity as account bank under the Accounts Agreement.

“Accounts” means, collectively, the Collection Account, each of the Debt Service Accounts, and the Additional Amortization Account.

“Accounts Agreement” means the account agreement, dated the Issue Date, among the Republic, the Trustee, the 2026 Notes Trustee and the Account Bank.

“Additional Amortization Account” has the meaning ascribed thereto in “—Accounts Agreement— Accounts.”

“Afobaka Transfer” means the transfer to an Eligible Transferee of all rights, title and interest in the Afobaka Dam pursuant to the Afobaka Hydroworks Transfer And Execution Agreement, which was approved by the National Assembly of Suriname by Act of September 6, 2019 (Bulletin of Acts and Decrees 2019, number 96).

“Afobaka Dam” means the embankment dam with a main gravity dam section on the Suriname River near Afobaka in the Brokopondo District of the Republic together with related transmission lines, an access road, a bridge and saddle dams.

“Bronkolonko Gold Mine Project” means the Bronkolonko gold mine concession owned and operated by Rosebel Gold Mines N.V.

110 “Business Day” means any day that is not a Saturday or Sunday, and that is not a day on which banking or trust institutions or organizations are authorized generally or obligated by law, regulation, or executive order to close in Wilmington, DE or New York City (or in the city where the relevant paying or transfer agent is located).

“Cash Equivalents” means at any time any of the following:

(a) U.S. dollars received in the ordinary course of business;

(b) U.S. Government Obligations or certificates representing an ownership interest in U.S. Government Obligations with maturities not exceeding one year from the date of acquisition;

(c) (i) demand deposits, (ii) time deposits and certificates of deposit with maturities of one year or less from the date of acquisition, (iii) bankers’ acceptances with maturities not exceeding one year from the date of acquisition, and (iv) overnight bank deposits, in each case with any bank or trust company organized or licensed under the laws of the United States or any state thereof having capital, surplus and undivided profits in excess of US$500.0 million whose short-term debt is rated “A-2” or higher by S&P, “A-2” or higher by Fitch or “P-2” or higher by Moody’s (or such equivalent rating by at least one nationally recognized statistical rating organization registered under Section 15E of the Exchange Act);

(d) repurchase obligations with a term of not more than seven days for underlying securities of the type described in clauses (b) and (c) above entered into with any financial institution meeting the qualifications specified in clause (c) above;

(e) commercial paper rated at least “P-1” by Moody’s, “A-1” by S&P or “A-1” or higher by Fitch and maturing within one year after the date of acquisition; or

(f) money market funds at least 95.0% of the assets of which consist of investments of the type described in clauses (a) through (e) above.

“Cash Flow Condition” means the satisfaction of the following conditions:

(i) the receipt by the Republic from each IAMGOLD Joint Venture that has entered into an agreement providing for the payment of royalties to the Republic of an agreement in writing of such IAMGOLD Joint Venture to pay royalty payments made pursuant to such agreement directly to the Collection Account in U.S. dollars; and

(ii) the receipt by the Republic from each IAMGOLD Joint Venture that is a party to a Power Purchase Agreement with the Republic or any entity controlled by the Republic of an agreement in writing of such IAMGOLD Joint Venture to make payments pursuant to such Power Purchase Agreements directly to the Collection Account in U.S. dollars.

“Collection Account” has the meaning ascribed thereto in “—Accounts Agreement—Accounts.”

“Debt Service Accounts” has the meaning ascribed thereto in “—Accounts Agreement—Accounts.”

“DPP1” means the thermal power station located at the Saramaccastraat power plant in the Paramaribo district of Suriname and consisting of five diesel-burning generator sets and eight heavy fuel oil burning generator sets, which as of the Issue Date is operated by EBS.

“DPP2” means the thermal power station located at the Saramaccastraat power plant in the Paramaribo district of Suriname and consisting of four heavy fuel oil burning generator sets, which as of the Issue Date is operated by EBS.

“EBS” means Energie Bedrijven Suriname N.V.

111 “EBS Generation Assets” means DPP1 and DPP2.

“Eligible Transferee” means any of (i) Staatsolie, (ii) SPCS, (iii) any other directly or indirectly wholly- owned subsidiary of Staatsolie, or (iv) any other directly or indirectly wholly-owned state entity of the Republic, provided that, in the case of (iv), the EBS Generation Assets are managed by Staatsolie, SPCS or another directly or indirectly wholly-owned subsidiary of Staatsolie.

“Escrow Account” means a segregated account maintained by the Escrow Agent that includes only U.S. dollars, Cash Equivalents and the proceeds thereof, and interest earned thereon.

“Escrow Agent” means Wilmington Trust, National Association in its capacity as escrow agent under the Escrow Agreement.

“Escrow Agreement” means the escrow agreement, dated the Issue Date, among the Republic, Suralco and the Escrow Agent.

“Excess Amount”, with respect to any Notes Payment Date, means the amount on deposit in the Additional Amortization Account as of the immediately preceding 2026 Notes Payment Date.

“External” means with reference to any Indebtedness, any Indebtedness issued and placed outside of the territory of the Republic.

“IAMGOLD” means IAMGOLD Corporation, a corporation organized under the laws of Canada.

“IAMGOLD Joint Ventures” means (i) the Rosebel Gold Mine Project, (ii) the Saramacca Gold Mine Project, (iii) the Bronkolonko Gold Mine Project, and (iv) any successor to any of the foregoing.

“Indebtedness” means a person’s actual or contingent payment obligations for borrowed money together with such person’s actual or contingent liabilities under guarantee or similar arrangements to secure the payment of any other party’s obligations for borrowed money.

“Issue Date” means December 20, 2019.

“Lien” means any lien, pledge, mortgage, security interest, deed of trust, charge or other encumbrance whether in effect on the date of the Indenture or at any time thereafter, including, without limitation, any equivalent claim or interest created or arising under the laws of the Republic.

“Liquidity Event” means the occurrence of any of the following events in each case if more than 30 days prior to the maturity date for the Note: (a) the incurrence by the Republic following the Issue Date, in one transaction or any series of related transactions, of External Indebtedness (other than the Notes and other than Indebtedness incurred (i) with the International Monetary Fund or any multi-lateral development banks or (ii) in connection with the development of infrastructure in the Republic) in a principal amount equal to or exceeding the aggregate principal amount of the Notes outstanding at the time of such incurrence (or its equivalent in other currencies), or (b) the sale or monetization by the Republic, directly or indirectly, and whether in one transaction or a series of transactions, of all or any portion of the Republic’s interests in any IAMGOLD Joint Venture.

“Mineral Agreement” means the Mineral Agreement, dated April 7, 1994, among the Republic and Rosebel Gold Mines N.V. (as modified, supplemented or amended by the Amending and Supplemental Agreement to the Mineral Agreement, dated March 13, 2003, the Amended and Supplemental Agreement, dated June 6, 2013, and as may be further amended, modified, supplemented or replaced) and any other mineral agreement relating to the activities of the IAMGOLD Joint Ventures that provides for the payment of royalties to the Republic or any entity controlled by the Republic.

“Notes Debt Service Account” has the meaning ascribed thereto in “—Accounts Agreement—Accounts.”

112 “Notes Debt Service Requirement” means, as of any date of calculation, the aggregate amount of interest and the Scheduled Amortization Amount that will become due and payable on the next succeeding Notes Payment Date.

“Notes Payment Date” means each June 30 and December 30 of each year, beginning on June 30, 2020.

“Payment Date” means each Notes Payment Date and each 2026 Notes Payment Date.

“person” and “party” include the Republic.

“Power Purchase Agreement” means any power purchase agreement under which any IAMGOLD Joint Venture or any successor or affiliate thereof is the power purchaser and to which the Republic, EBS or another state- owned entity is the counterparty.

“Public External Indebtedness” means Public Indebtedness that is External.

“Public Indebtedness” means, with respect to any person, any Indebtedness of, or guaranteed by, such person which (A) (i) is publicly offered or privately placed in securities markets, (ii) is in the form of, or represented by, bonds, notes or other securities or any guarantees thereof, or (iii) is, or was expressly intended at the time of issue to be, quoted, listed or traded on any stock exchange, automated trading system or over-the-counter or other securities market (including, without prejudice to the generality of the foregoing, securities that are issued against cash consideration and that are eligible for sale pursuant to Rule 144A or Regulation S (or any successor law or regulation of similar effect)) and (B) has an original maturity of more than one year or is combined with a commitment so that the original maturity of one year or less may be extended at the option of such person to a period in excess of one year).

“Rosebel Gold Mine Project” means the gold mine owned and operated by Rosebel Gold Mines N.V., a joint venture company that is 95%-owned by IAMGOLD and 5%-owned by the Republic.

“Saramacca Gold Mine Project” means the Saramacca gold mine concession owned and operated by Rosebel Gold Mines N.V.

“Scheduled Amortization Amount” means US$15,000,000; provided that, if on any date of determination, the outstanding aggregate principal amount of the Notes is less than US$15,000,000, the Scheduled Amortization Amount shall be equal to the outstanding aggregate principal amount of the Notes, and if on the final maturity date the outstanding principal amount of the Notes is more than US$15,000,000 the Scheduled Amortization Amount shall be the outstanding principal amount of the Notes.

“SPCS” means Staatsolie Power Company Suriname N.V.

“Staatsolie” means Staatsolie Maatschappij Suriname N.V.

“Staatsolie Credit Agreement” means that Fourth Amended and Restated Credit Agreement, dated as of May 25, 2018, among Staatsolie, Credit Suisse AG, Cayman Islands Branch, as administrative agent, and the guarantors, lenders and other parties thereto, as such agreement is in effect on the Issue Date.

“Suralco” means Suriname Aluminum Company, L.L.C. and its successors.

“Transfer Certificate” means a transfer certificate in the form attached to the Accounts Agreement

“Transfer Instruction Date” means the date that is ten (10) calendar days prior to each Payment Date.

“U.S. Government Obligations” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States is pledged and that are not callable or redeemable at the issuer’s option..

113 114 TRANSFER RESTRICTIONS

The Republic is a “foreign government” as defined in Rule 405 under the Securities Act and is eligible to register securities on Schedule B of the Securities Act. Therefore, the Republic is not subject to the information provision requirements of Rule 144A(d)(4)(i) under the Securities Act.

The Notes have not been registered and will not be registered under the Securities Act, any U.S. state securities laws or the laws of any other jurisdiction, and may not be offered or sold except pursuant to an effective registration statement or pursuant to transactions exempt from, or not subject to, registration under the Securities Act and the securities laws of any other jurisdiction. Accordingly, the Notes are being offered and sold only:

 in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act; and

 outside of the United States to Non-U.S. persons in offshore transactions meeting the requirements of Rule 903 in reliance on Regulation S under the Securities Act.

Purchasers’ Representations and Restrictions on Resale and Transfer

Each purchaser of Notes (other than the Initial Purchaser in connection with the initial issuance and sale of Notes) and each owner of any beneficial interest therein will be deemed, by its acceptance or purchase thereof, to have represented and agreed as follows:

(1) it is purchasing the Notes for its own account or an account with respect to which it exercises sole investment discretion and it and any such account is either (a) a qualified institutional buyer and is aware that the sale to it is being made pursuant to Rule 144A or (b) a non-U.S. person that is outside the United States;

(2) it acknowledges that the Notes have not been registered under the Securities Act or with any securities regulatory authority of any U.S. state or any other jurisdiction and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except as set forth below;

(3) it understands and agrees that Notes offered in the United States to qualified institutional buyers will be represented by one or more Global Notes and that Notes offered outside the United States pursuant to Regulation S will also be represented by one or more Global Notes;

(4) it will not resell or otherwise transfer any of such Notes except (a) to the Republic, (b) within the United States to a qualified institutional buyer in a transaction complying with Rule 144A under the Securities Act, (c) outside the United States in compliance with Rule 903 or 904 under the Securities Act, (d) pursuant to another exemption from registration under the Securities Act (if available) or (e) pursuant to an effective registration statement under the Securities Act;

(5) it agrees that it will give to each person to whom it transfers the Notes notice of any restrictions on transfer of such Notes;

(6) it acknowledges that prior to any proposed transfer of Notes (other than pursuant to an effective registration statement or in respect of Notes sold or transferred either pursuant to Rule 144A or Regulation S) the holder of such Notes may be required to provide certifications relating to the manner of such transfer as provided in the indenture;

(7) it acknowledges that the Trustee, Registrar or Transfer Agent for the Notes will not be required to accept for registration the transfer of any Notes acquired by it, except upon presentation of evidence satisfactory to us that the restrictions set forth herein have been complied with;

115 (8) it acknowledges that the Republic, the Initial Purchaser and other persons will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that if any of the acknowledgements, representations and agreements deemed to have been made by its purchase of the Notes are no longer accurate, it will promptly notify the Republic and the Initial Purchaser; and

(9) if it is acquiring the Notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each account.

Legends

The following is the form of restrictive legend which will appear on the face of the Restricted Global Note, and which will be used to notify transferees of the foregoing restrictions on transfer:

“This note has not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws. The holder hereof, by purchasing this note, agrees for the benefit of the issuer that this note or any interest or participation herein may be offered, resold, pledged or otherwise transferred only (1) to the issuer, (2) so long as this note is eligible for resale pursuant to Rule 144A under the Securities Act (“Rule 144A”), to a person who the seller reasonably believes is a qualified institutional buyer (as defined in Rule 144A) in accordance with Rule 144A, (3) in an offshore transaction in accordance with Rule 903 or 904 of Regulation S under the Securities Act, (4) pursuant to an exemption from registration under the Securities Act (if available) or (5) pursuant to an effective registration statement under the Securities Act, and in each of such cases in accordance with any applicable securities laws of any state of the United States or other applicable jurisdiction. The holder hereof, by purchasing this note, represents and agrees that it shall notify any purchaser of this note from it of the resale restrictions referred to above.

This legend may be removed solely at the discretion and at the direction of the issuer.”

The following is the form of restrictive legend which will appear on the face of the Regulation S Global Note and which will be used to notify transferees of the foregoing restrictions on transfer:

This legend may be removed solely at the discretion and at the direction of the issuer.”

The Republic may, in its discretion, in the event of one or more issuances of additional Notes, as described under “Description of the Notes—Further Issues” elect not to remove the above legends. The above legends (including the restrictions on resale specified thereon) may be removed solely in the discretion and at the direction of the Republic.

For further discussion of the requirements (including the presentation of transfer certificates) under the indenture to effect exchanges or transfers of interest in Global Notes and certificated Notes, see “Book Entry Settlement and Clearance.”

116 PLAN OF DISTRIBUTION

Oppenheimer & Co. Inc. is the Initial Purchaser and has entered into a purchase agreement with the Republic with respect to the Notes (the “Purchase Agreement”). Subject to certain conditions, the Initial Purchaser has agreed to purchase the Notes, and the Republic will agree to sell the Notes to the Initial Purchaser.

The Purchase Agreement provides that the obligations of the Initial Purchaser to purchase the Notes are subject to approval of legal matters by counsel and to other conditions. Subject to the procedures described in the following paragraph, the Initial Purchaser must purchase all the Notes if it purchases any of the Notes.

The Purchase Agreement provides that the obligation of the Initial Purchaser to purchase the Notes is on a “best efforts” basis and, to the extent that any investor who has agreed to purchase Notes from the Initial Purchaser fails to make payment to the Initial Purchaser of the purchase price of such Notes, the Initial Purchaser has the right to rescind the purchase of such Notes from the Issuer, whereupon such Notes will be returned to the Issuer for cancellation, the Issuer will refund the purchase price of such Notes to the Initial Purchaser and the aggregate amount of Notes issued on the Issue Date will be accordingly reduced. On the Issue Date, the net proceeds from the sale of the Notes to the Initial Purchaser will be held in escrow by Oppenheimer Trust Company of Delaware, in an account in respect of which it will be acting as escrow agent, until the close of business on the Issue Date in order to ensure that funds are available to the Issuer to make such refund of the purchase price in the event of any such rescission by the Initial Purchaser. Oppenheimer Trust Company of Delaware is an affiliate of Oppenheimer & Co. Inc.

The Republic has been advised that the Initial Purchaser proposes to resell the Notes at the issue price set forth on the cover page of this Offering Memorandum within the United States to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A and outside the United States in reliance on Regulation S. See “Transfer Restrictions.” The price at which the Notes are offered may be changed at any time without notice.

The Notes have not been and will not be registered under the Securities Act or any state securities law and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S) except in transactions exempt from, or not subject to, the registration requirements of the Securities Act. See “Transfer Restrictions.”

All sales of the Notes in the United States will be made through Oppenheimer & Co. Inc. or otherwise as permitted by applicable U.S. law. Republic Bank Limited is not a broker-dealer registered with the U.S. SEC and therefore may not make sales of any Notes in the United States or to U.S. persons except in compliance with applicable U.S. laws and regulations.

In addition, until 40 days after the commencement of this offering, an offer or sale of Notes within the United States by a dealer that is not participating in this offering may violate the registration requirements of the Securities Act if that offer or sale is made otherwise than in accordance with Rule 144A.

Although application has been made to list the Notes on the Official List of the Luxembourg Stock Exchange and to have the Notes trade on the Euro MTF market, the listing does not assure that a trading market for the Notes will develop. The Initial Purchaser intends to make a secondary market for the Notes. However, it is not obligated to do so and may discontinue making a secondary market for the Notes at any time without notice. No assurance can be given as to how liquid the trading market for the Notes will be. The Republic cannot assure you that the prices at which the Notes will trade in the market after this offering will not be lower than the initial issue price or that an active trading market for the Notes will develop and continue after this offering.

In connection with the offering, the Initial Purchaser may purchase and sell Notes in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions and stabilizing purchases.

● Short sales involve secondary market sales by the Initial Purchaser of a greater number of Notes than it is required to purchase in the offering.

117 ● Covering transactions involve purchases of Notes in the open market after the distribution has been completed in order to cover short positions.

● Stabilizing transactions involve bids to purchase Notes so long as the stabilizing bids do not exceed a specified maximum.

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the Initial Purchaser for its own account, may have the effect of preventing or retarding a decline in the market price of the Notes. They may also cause the price of the Notes to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The Initial Purchaser may conduct these transactions in the over-the- counter market or otherwise. If the Initial Purchaser commences any of these transactions, it may discontinue them at any time.

The Initial Purchaser is a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. The Initial Purchaser and/or certain of its affiliates have in the past performed commercial banking, investment banking and advisory services for the Republic from time to time for which they have received customary fees and reimbursement of expenses and may, from time to time, engage in transactions with and perform services for the Republic in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses.

In the ordinary course of their various business activities, the Initial Purchaser and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own accounts and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve the Republic’s securities and instruments. The Initial Purchaser or its affiliates may have a lending relationship with the Republic and may routinely hedge their credit exposure to the Republic consistent with their customary risk management policies. Typically, the Initial Purchaser and such affiliates would hedge such exposure by entering into transactions which consist of either the purchase of credit default swaps or the creation of short positions in the Republic’s securities, including potentially the Notes. Any such short positions could adversely affect future trading prices of the Notes. The Initial Purchaser and its affiliates may communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities or instruments.

The Republic has agreed to indemnify the Initial Purchaser against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Initial Purchaser may be required to make because of any of those liabilities.

Selling Restrictions

Prohibition of Sales to EEA Retail Investors

The Initial Purchaser has represented and agreed that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Notes to any retail investor in the European Economic Area. For the purposes of this provision, a retail investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or (ii) a customer within the meaning of Directive (EU) 2016/97 (the Insurance Distribution Directive), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive (EU) 2017/1129 (the Prospectus Regulation). Consequently, no key information document required by Regulation (EU) No 1286/2014 (as amended, the “PRIIPs Regulation”) for offering or selling the Notes or otherwise making them available to retail investors in the EEA has been prepared and therefore offering or selling the Notes or otherwise making them available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.

118 United Kingdom

The Initial Purchaser has represented and agreed that:

(i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act (the “FSMA”)) received by it in connection with the issue or sale of the Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Republic; and

(ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Notes in, from or otherwise involving the United Kingdom.

Canada

The Notes may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Notes must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this Offering Memorandum (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

Pursuant to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non- Canadian jurisdiction, section 3A.4) of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the Initial Purchaser is not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.

Singapore

This Offering Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Cap. 289 of Singapore (the “SFA”) and accordingly, the Notes may not be offered or sold, nor may the Notes be the subject of an invitation for subscription or purchase, nor may this Offering Memorandum or any other document or material in connection with the offer or sale, or invitation for subscription or purchase of the Notes be circulated or distributed, whether directly or indirectly, to any person in Singapore other than (a) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (b) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to an offer referred to in Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA or (c) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Notes are acquired by persons who are relevant persons specified in Section 275 of the SFA, namely:

(a) a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

(b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor; or

119 (c) the shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within 6 months after that corporation or that trust has acquired the Notes pursuant to an offer made under Section 275 of the SFA except:

(1) to an institutional investor (under Section 274 of the SFA) or to a relevant person as defined in Section 275(2) of the SFA, or any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights or interest in that trust are acquired at a consideration of not less than US$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

(2) where no consideration is or will be given for the transfer;

(3) where the transfer is by operation of law; or

(4) as specified in Section 276(7) of the SFA.

Hong Kong

The Initial Purchaser has represented and agreed that:

(a) it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Notes other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and any rules made under the Ordinance; or (b) in other circumstances which do not result in the document being an “Offering Memorandum” as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance; and

(b) it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Notes, which is directed at, or the contents of which are likely to be accessed or ready by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Notes which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under that Ordinance.

Chile

Pursuant to Law No. 18,045 of Chile (the securities market law of Chile) and Rule (Norma de Carácter General) No. 336, dated June 27, 2012, issued by the SVS, the Notes may be privately offered in Chile to certain “qualified investors” identified as such by SVS Rule 336 (which in turn are further described in Rule N°. 216, dated June 12, 2008, of the SVS). SVS Rule 336 requires the following information to be provided to prospective investors in Chile:

1. Date of commencement of the offer: December 13, 2019. The offer of the Notes is subject to Rule (Norma de Carácter General) No. 336, dated June 27, 2012, issued by the SVS.

2. The subject matter of this offer are securities not registered with the Securities Registry (Registro de Valores) of the SVS, nor with the foreign securities registry (Registro de Valores Extranjeros) of the SVS, due to the Notes not being subject to the oversight of the SVS.

3. Since the Notes are not registered in Chile there is no obligation by the issuer to make publicly available information about the Notes in Chile.

4. The Notes shall not be subject to public offering in Chile unless registered with the relevant Securities Registry of the SVS.

120 Información a los Inversionistas Chilenos

De conformidad con la ley N° 18.045, de mercado de valores y la Norma de Carácter General N° 336 (la “NCG 336”), de 27 de junio de 2012, de la SVS, los bonos pueden ser ofrecidos privadamenta a ciertos “inversionistas calificados”, a los que se refiere la NCG 336 y que se definen como tales en la Norma de Carácter General N° 216, de 12 de junio de 2008, de la SVS. La siguiente información se proporciona a potenciales inversionistas de conformidad con la NCG 336:

1. La oferta de los bonos comienza el 13 de diciembre, 2019, y se encuentra acogida a la NCG 336, de fecha 27 de junio de 2012, de la SVS.

2. La oferta versa sobre valores no inscritos en el Registro de Valores o en el Registro de Valores Extranjeros que lleva la SVS, por lo que tales valores no están sujetos a la fiscalización de esa Superintendencia.

3. Por tratarse de valores no inscritos en Chile no existe la obligación por parte del emisor de entregar en Chile información pública sobre los mismos.

4. Estos valores no podrán ser objeto de oferta pública en Chile mientras no sean inscritos en el Registro de Valores correspondiente.

Brazil

The Notes have not been and will not be issued nor publicly placed, distributed, offered or negotiated in Brazilian capital markets. The issuance of the Notes has not been or will be registered with the CVM. Any public offering or distribution, as defined under Brazilian laws and regulations, of the Notes in Brazil is not legal without prior registration under Law No. 6,385/76, as amended, and Instruction No. 400, issued by the CVM on December 29, 2003, as amended. Documents relating to the offering of the Notes, as well as information contained therein, may not be supplied to the public in Brazil (as the offering of the Notes is not a public offering of securities in Brazil), nor be used in connection with any offer for subscription or sale of the Notes to the public in Brazil. Therefore, the Notes are not being offered or sold in Brazil, except in circumstances which do not constitute a public offering, placement, distribution or negotiation of securities in the Brazilian capital markets regulated by Brazilian laws and regulations. Persons wishing to offer or acquire the Notes within Brazil should consult with their own counsel as to the applicability of registration requirements or any exemption therefrom.

Colombia

Neither the Notes nor this Offering Memorandum have been or will be registered with or approved by the Superintendency of Finance of Colombia (Superintendencia Financiera de Colombia) or the Colombian Stock Exchange (Bolsa de Valores de Colombia). Therefore, the Notes may not be publicly offered in Colombia. This material is for your sole and exclusive use as a determined entity, including any of your shareholders, administrators or employees, as applicable. You acknowledge the Colombian laws and regulations (specifically foreign exchange and tax regulations) applicable to any transaction or investment consummated pursuant hereto and represent that you are the sole liable party for full compliance with any such laws and regulations.

Guatemala

In the Republic of Guatemala, the Notes will comply with the rules of the Securities and Commodities Market Law (Decree 34-96) and its regulation (Governmental Accord 557-97). The Notes will not be registered for public offering with the Securities Market Registry (Registro del Mercado de Valores y Mercancías) of the Republic of Guatemala, and, accordingly, the Notes will not be offered or sold: (i) to any person in an open market, directly or indirectly by means of massive communication; (ii) through a third party or intermediary to any individual person or entity that is considered an institutional investor, including entities that are under the supervision of the Banking Regulator, the Social Security Institute of Guatemala (Instituto de Seguridad Social–IGSS) and its affiliates; (iii) to any entity or vehicle used for purposes of collective investment; or (iv) to more than 35 individual persons or entities.

121 Panama

THE NOTES HAVE NOT BEEN REGISTERED WITH THE SUPERINTENDENCY OF CAPITAL MARKETS OF PANAMA NOR HAVE THE NOTES BEEN LISTED ON THE PANAMANIAN STOCK EXCHANGE. ACCORDINGLY, (I) THE NOTES CANNOT BE PUBLICLY OFFERED OR SOLD IN PANAMA, EXCEPT IN TRANSACTIONS EXEMPTED FROM REGISTRATION UNDER THE PANAMANIAN SECURITIES LAWS, (II) THE SUPERINTENDENCY OF CAPITAL MARKETS OF PANAMA HAS NOT REVIEWED THE INFORMATION CONTAINED IN THIS OFFERING MEMORANDUM, (III) THE NOTES AND THIS OFFERING ARE NOT SUBJECT TO THE SUPERVISION OF THE SUPERINTENDENCY OF CAPITAL MARKETS OF PANAMA, AND (IV) THE NOTES DO NOT BENEFIT FROM THE TAX INCENTIVES PROVIDED BY THE PANAMANIAN SECURITIES LAWS AND REGULATIONS.

Peru

The Notes and this Offering Memorandum have not, and will not be, approved by or registered with, the Superintendency of the Securities Market (Superintendencia del Mercado de Valores) or the Lima Stock Exchange (Bolsa de Valores de Lima).

Uruguay

In Uruguay, the Notes are being placed relying on a private placement (“oferta privada”) pursuant to section 2 of law 16,749. The Notes are not and will not be registered with the Central Bank of Uruguay to be publicly offered in Uruguay. The Notes do not qualify as an investment fund regulated by Uruguayan law 16,774, as amended.

Paraguay

The Notes have not and will not be registered with the Paraguayan National Securities Commission (Comisión Nacional de Valories) or on the Paraguayan Stock Exchange. Therefore, the Notes may not be publicly offered in Paraguay.

Bahamas

The Notes may not be offered or sold in The Bahamas via a public offer. Notes may not be offered or sold or otherwise disposed of in any way to any person(s) deemed “resident” for exchange control purposes by the Central Bank of The Bahamas.

British Virgin Islands

The Notes are not being, and may not be offered to the public or to any person in the British Virgin Islands for purchase or subscription by or on behalf of the Issuer. The Notes may be offered to companies incorporated under the BVI Business Companies Act, 2004 (British Virgin Islands) (“BVI Companies”), but only where the offer will be made to, and received by, the relevant BVI Company entirely outside of the British Virgin Islands.

122 Jamaica

The Notes have not been, and are not being, publicly offered in Jamaica. This Offering Memorandum does not and is not intended to constitute a public offer of securities in Jamaica.

Pursuant to guidelines (“Guidelines”) numbered SR-GUID-08/05-0016 published by the Financial Services Commission of Jamaica (“FSC”), securities may be offered in Jamaica by way of an exempt distribution. Exempt distributions are exempt from the requirement to register a prospectus or other offering document. The registration requirement under the provisions of the Securities Act of Jamaica in respect of a trade in a security, where the security is offered by way of an exempt distribution, is satisfied by compliance with the provisions of the Guidelines.

The following distributions of securities are exempt distributions under the Guidelines: i) Securities that are offered to Accredited Investors (as defined in the Guidelines); ii) Securities with an acquisition cost to the purchaser of not less than Ten Million Jamaican Dollars paid in cash at the time of the purchase; iii) Securities offered by an issuer with an assigned rating of at least BBB+ (or equivalent rating) by a recognized rating agency, where the issuer is already a reporting issuer; and iv) Securities that are issued by a private issuer to connected persons as outlined in the Guidelines.

THE NOTES ARE SUBJECT TO TRANSFER RESTRICTIONS WHICH inter alia RESTRICT TRANSFERS TO PERSONS WHO ARE WITHIN THE CATEGORIES OF (1) ACCREDITED INVESTORS; AND (2) MINIMUM PURCHASE EXEMPTIONS PURSUANT TO PARAGRAPHS 3.1 AND 3.2 OF THE GUIDELINES.

Trinidad and Tobago

The trade of any Notes in Trinidad and Tobago will be limited to no more than 35 investors and will be in accordance with the Securities Act, 2012 and all guidelines currently in force and issued by the Trinidad and Tobago Securities and Exchange Commission.

General

No action has been taken by the Republic or the Initial Purchaser that would, or is intended to, permit a public offer of the Notes in any country or jurisdiction where any such action for that purpose is required.

Accordingly, the Initial Purchaser has undertaken that it will not, directly or indirectly offer or sell any Notes or distribute or publish any offering circular, this Offering Memorandum, form of application, advertisement or other document or information in any country or jurisdiction except under circumstances that will, to the best of its knowledge and belief, result in compliance with any applicable laws and regulations and all offers and sales of Notes by it will be made on the same terms.

123 TAXATION

Suriname Taxation

The summary contains a description of the principal Suriname tax consequences of the purchase, ownership and disposition of the Notes. This summary does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase Notes and does not address all tax considerations that may be relevant to all categories of prospective purchasers of the Notes, some of whom may be subject to special rules. This summary does not describe any tax consequences arising under the laws of any state, locality or taxing jurisdiction other than Suriname. The information set forth below is a summary only. This summary is based on the tax laws of Suriname as in effect on the date of this Offering Memorandum, as well as regulations, rulings and decisions of Suriname available on or before such date and now in effect. All of the foregoing is subject to change, which change could apply retroactively and could affect the continued validity of the summary.

Capital Duty/Stamp Duty

Suriname does not levy a capital duty. Consequently, no capital duty will be due with the issuance of the Notes. Furthermore, based on the Stamp Tax Ordinance, no stamp tax will be due with respect to the issuance of the Notes.

Withholding Tax

Suriname does not levy withholding tax on interest payments. Consequently, interest payments on the Notes will not be subject to Surinamese withholding taxes.

Individual Income Tax

Based on the Income Tax Act of 1922, a non-resident individual holder of the Notes will not be subject to Surinamese income tax for interest income or for capital gains realized on the disposition of the Notes. A resident individual holder of the Notes will be subject to Surinamese income tax for interest income but not for capital gains realized on the disposition of the Notes.

Corporate Income Tax

A non-resident corporate holder of the Notes will not be subject to Surinamese corporate income tax for interest income or for capital gains realized on the disposition of the Notes, provided that it has not been engaged in trade or business through a permanent establishment in Suriname. A resident corporate holder of the Notes will be subject to Surinamese corporate tax for interest income and capital gains realized on the disposition of the Notes.

U.S. Federal Income Taxation

The following discussion is a summary of certain U.S. federal income tax consequences of acquiring, owning and disposing of the Notes. Except where otherwise noted, this discussion applies only to U.S. Holders (as defined below) of Notes that purchase the Notes at the initial issue price indicated on the cover of this Offering Memorandum and that hold the Notes as “capital assets” (generally, property held for investment). This discussion is based on the Code, its legislative history, existing final, temporary and proposed U.S. Treasury regulations, administrative pronouncements by the U.S. Internal Revenue Service (the “IRS”) and judicial decisions, all as of the date hereof and all of which are subject to change (possibly on a retroactive basis) and to different interpretations.

124 This discussion does not purport to address all U.S. federal income tax consequences that may be relevant to a particular U.S. Holder and U.S. Holders are urged to consult their own tax advisors regarding their specific tax situations. The discussion does not address the tax consequences that may be relevant to U.S. Holders subject to special tax rules, including, for example:

 insurance companies;

 tax-exempt organizations;

 dealers in securities or currencies;

 traders in securities that elect the mark-to-market method of accounting with respect to their securities holdings;

 banks or other financial institutions;

 partnerships or other pass-through entities for U.S. federal income tax purposes;

 U.S. Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

 U.S. expatriates;

 regulated investment companies;

 real estate investment trusts;

 passive foreign investment companies, controlled foreign corporations or corporations that accumulate earnings to avoid U.S. federal income tax; or

 holders that hold the Notes as part of a hedge, straddle, conversion or other integrated transaction.

Further, this discussion does not address U.S. federal estate and gift tax consequences, alternative minimum tax consequences, or any state, local and non-U.S. tax consequences of acquiring, owning and disposing of the Notes.

As used herein, the term “U.S. Holder” means a beneficial owner of the Notes that is, for U.S. federal income tax purposes:

 an individual who is a citizen or resident of the United States;

 a corporation, or any other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

 an estate the income of which is subject to U.S. federal income tax regardless of its source; or

 a trust if (i) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has an election in effect under current U.S. Treasury regulations to be treated as a U.S. person.

If a partnership (or any other entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds the Notes, the tax treatment of the partnership and a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such partner or partnership should consult its own tax advisor as to its consequences of acquiring, owning and disposing of the Notes.

125 U.S. Holders

Stated Interest

Stated interest paid to a U.S. Holder on a Note, including any amount withheld in respect of any taxes and any Additional Amounts, will be includible in such U.S. Holder’s gross income as ordinary interest income at the time such payments are received or accrued in accordance with such U.S. Holder’s usual method of tax accounting for U.S. federal income tax purposes. In addition, interest on the Notes will be treated as foreign source income for U.S. federal income tax purposes and generally will constitute “passive category” income for most U.S. Holders. Subject to generally applicable restrictions and conditions (including a minimum holding period requirement), a U.S. Holder generally will be entitled to a foreign tax credit in respect of any foreign income taxes withheld on interest payments on the Notes. Alternatively, the U.S. Holder may deduct such taxes in computing taxable income for U.S. federal income tax purposes provided that the U.S. Holder does not elect to claim a foreign tax credit for any foreign income taxes paid or accrued for the relevant taxable year. The rules governing the foreign tax credit are complex. U.S. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Original Issue Discount

It is possible that the Notes will be issued with original issue discount (“OID”) for United States federal income tax purposes. The amount of OID on a Note will generally equal the excess of the “stated redemption price at maturity” of a note over its “issue price.” However, a Note will not be treated as issued with OID for United States federal income tax purposes if the stated redemption price at maturity exceeds the issue price by less than 0.25% of the stated redemption price at maturity multiplied by the number of complete years to maturity. The “stated redemption price at maturity” of a Note will equal the sum of its principal amount plus all other payments thereunder, other than payments of “qualified stated interest,” defined generally as stated interest that is unconditionally payable in cash or other property, other than our debt instruments, at least annually at a single fixed rate. The “issue price” of a Note will equal the first price at which a substantial amount of Notes are sold for money, excluding sales to underwriters, placement agents or wholesalers. The stated interest on the Notes will constitute qualified stated interest.

If the Notes are issued with OID, a U.S. Holder will be required to include in taxable income for any particular taxable year the daily portion of the OID described in the preceding paragraph that accrues on the Note for each day during the taxable year on which such holder holds the Note, whether reporting on the cash or accrual basis of accounting for United States federal income tax purposes. Thus, a U.S. Holder will be required to include OID in income in advance of the receipt of the cash to which such OID is attributable. The daily portion is determined by allocating to each day of an accrual period (generally, the period between interest payments or compounding dates) a pro rata portion of the OID allocable to such accrual period. The amount of OID that will accrue during an accrual period is the product of the “adjusted issue price” of the Note at the beginning of the accrual period multiplied by the yield to maturity of the Note less the amount of any qualified stated interest allocable to such accrual period. The “adjusted issue price” of a Note at the beginning of an accrual period will equal its issue price, increased by the aggregate amount of OID that has accrued on the Note in all prior accrual periods, and decreased by any payments made during all prior accrual periods on the Notes other than qualified stated interest.

A U.S. Holder may elect to treat all interest on a Note as OID and calculate the amount includible in gross income under the constant yield method described above. The election is to be made for the taxable year in which a U.S. Holder acquires a Note, and may not be revoked without the consent of the IRS. U.S. Holders should consult with their tax advisors about this election.

Sale, Exchange or Other Taxable Disposition

Upon the sale, exchange or other taxable disposition (including a redemption) of a Note, a U.S. Holder generally will recognize taxable gain or loss equal to the difference, if any, between the amount realized on the sale, exchange or other taxable disposition (other than accrued but unpaid stated interest, which will be taxable as ordinary income to the extent not previously included in gross income) and the U.S. Holder’s adjusted tax basis in the Note. A U.S. Holder’s adjusted tax basis in a Note generally will equal the cost of the Note to the U.S. Holder, increased by any OID included in the U.S. Holder’s income prior to the disposition of the note (if any) and reduced by any prior

126 payments of principal. Any such gain or loss will generally be capital gain or loss and will be long-term capital gain or loss if the Note has been held for more than one year at the time of its sale, exchange or other taxable dispositions. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations under the Code.

Any gain or loss realized on the sale, exchange or other taxable disposition of a Note by a U.S. Holder generally will be treated as U.S. source gain or loss, as the case may be. If any gain from the sale, exchange or other taxable disposition of Notes is subject to foreign income or withholding tax, U.S. Holders may not be able to credit such tax against their U.S. federal income tax liability under the U.S. foreign tax credit limitations of the Code (because such gain generally would be U.S. source income). However, the U.S. Holder may be able to deduct such taxes in computing taxable income for U.S. federal income tax purposes.

Medicare Tax

A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax on the lesser of (1) the U.S. Holder’s “net investment income” (or undistributed “net investment income” in the case of estates and trusts) for the relevant taxable year and (2) the excess of the U.S. Holder’s modified adjusted gross income for the taxable year over a certain threshold (which in the case of individuals will be between US$125,000 and US$250,000, depending on the individual’s circumstances). A holder’s net investment income will generally include its interest income and its net gains from the disposition of a Note, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). If you are a U.S. Holder that is an individual, estate or trust, you are urged to consult your own tax advisor regarding the applicability of this Medicare tax to your income and gains in respect of your investment in the Notes.

U.S. Backup Withholding and Information Reporting

Backup withholding (currently at a rate of 24%) and information reporting requirements generally apply to payments to U.S. Holders of principal of, and interest on, a Note (including OID and Additional Amounts, if any) that are made by a U.S. payor or U.S. middleman, to a U.S. Holder, unless the U.S. Holder (i) is a corporation or comes within certain other exempt categories of U.S. Holders and demonstrates this fact when so required, or (ii) in the case of backup withholding, provides a correct taxpayer identification number, certifies that it is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules.

Backup withholding is not an additional tax. A U.S. Holder of Notes generally will be entitled to credit any amounts withheld under the backup withholding rules against its U.S. federal income tax liability or to obtain a refund of the amounts withheld provided the required information is furnished to the IRS in a timely manner.

Foreign Asset Reporting

In addition, certain U.S. Holders who are individuals are required to report information relating to “specified foreign financial assets,” including an interest in the Notes, subject to certain exceptions (including an exception for Notes held in accounts maintained by certain financial institutions). U.S. Holders should consult their tax advisors regarding the effect, if any, of this requirement on their ownership and disposition of the Notes.

The above description is not intended to constitute a complete analysis of all tax consequences relating to the ownership of Notes. Prospective purchasers of Notes should consult their own tax advisors concerning the tax consequences of their particular situations.

Investors who are in any doubt as to their position should consult their professional advisors.

127 OFFICIAL STATEMENTS

Information included herein which is identified as being derived from a publication of the Republic or one of its agencies or instrumentalities is included herein on the authority of such publication as a public official document of the Republic. All other information in this Offering Memorandum is included as a public official statement made on the authority of the Ministry of Finance of the Republic, in his official capacity as such.

VALIDITY OF THE NOTES

The validity of the Notes will be passed upon on behalf of the Republic by the Procurator General of the Republic, Surinamese counsel to the Republic, and by Morgan, Lewis & Bockius LLP, U.S. counsel for the Republic. The validity of the Notes will be passed upon on behalf of the Initial Purchaser by Naarendorp Advocaten, Surinamese counsel for the Initial Purchaser, and by Greenberg Traurig LLP, U.S. counsel for the Initial Purchaser. As to all matters of Surinamese law, Morgan, Lewis & Bockius LLP will rely on the opinion of the Procurator General of the Republic and Greenberg Traurig will rely upon the opinion of Naarendorp Advocaten.

128 GENERAL INFORMATION

1. The Regulation S Global Note and the Restricted Global Note have been accepted for clearance through DTC, Euroclear and Clearstream, Luxembourg. The CUSIP, ISIN and Common Code numbers for the Restricted Global Note and the Regulation S Global Note are as follows:

CUSIP ISIN Common Code Restricted Global Note 86886P AB8 US86886PAB85 209584972 Regulation S Global Note P68788 AB7 USP68788AB70 209584778

The Republic’s LEI Code is 254900SYU4G5JM13TN77.

2. The Republic has obtained all necessary consents, approvals and authorizations in the Republic of Suriname in connection with the issue and performance of the Notes. The issue of the Notes has been authorized by (a) the Minister of Finance pursuant to the State Debt Act, following consultation with the Administrator General and (b) the Foreign Exchange Commission. The Indenture, the Purchase Agreement and the Accounts Agreement will be submitted for registration with the Court of Audit of Suriname.

3. To the best of its knowledge, except as disclosed in this Offering Memorandum, the Republic is not involved in any litigation, arbitration, or administrative proceedings relating to the claims or amounts which are material in the context of the issuance of Notes nor, so far as it is aware, having made reasonable inquiries, is any such material litigation or arbitration or administrative proceeding involving it pending or threatened.

4. Except as disclosed in this Offering Memorandum, there has been no material adverse change in the fiscal, economic or political condition or affairs of the Issuer since December 31, 2018 which is material in the context of the issue of the Notes.

5. On April 18, 2019, Standard & Poor’s Ratings Services (“S&P”) affirmed the long-term sovereign credit ratings of Suriname at “B” with a Stable outlook. On February 28, 2019, Moody’s Investors Service (“Moody’s”) affirmed the Republic’s sovereign credit ratings at “B2,” changing the outlook from Negative to Stable. On August 21, 2019, Fitch Ratings affirmed the long-term sovereign credit ratings of Suriname at “B” and revised the outlook from Stable to Negative. Ratings are not a recommendation to purchase, hold or sell securities and may be changed, suspended or withdrawn at any time. The Republic’s current ratings and the rating outlooks currently assigned to the Republic are dependent upon economic conditions and other factors affecting credit risk that are outside the control of the Republic. Any adverse change in the Republic’s credit ratings could adversely affect the trading price for the Notes. Each rating should be evaluated independently of the others. Detailed explanations of the ratings may be obtained from the rating agencies.

6. Application has been made to list the Notes on the Luxembourg Stock Exchange and to have the Notes admitted to trading on the Euro MTF market. Banque Internationale à Luxembourg SA has been appointed as Luxembourg listing agent.

7. Copies of the following documents may be obtained on any business day at the office of the listing agent in Luxembourg so long as any of the Notes are listed on the Luxembourg Stock Exchange:

(a) the Indenture (which includes the form of the Notes in the exhibits thereto);

(b) the Accounts Agreement;

(d) this Luxembourg Listing Prospectus.

129 ANNEX A: ELECTRICITY SECTOR REFORM

The following discussion contains certain forward-looking statements regarding the Government’s current plans for reform of the Suriname electricity sector. These statements are based upon beliefs of certain government officials and others as well as a number of assumptions and estimates which are inherently subject to significant uncertainties, many of which are beyond the control of the Republic. Future events may differ materially from those expressed or implied by such forward-looking statements. Such statements reflect the current views of the Republic with respect to future events and are subject to certain risks, uncertainties and assumptions. In light of these risks and uncertainties, there can be no assurances that the events described or implied in the forward-looking statements contained in this Annex will in fact occur. See “Forward-Looking Statements.”

General

The Government of Suriname is currently undertaking a restructuring and reform the country’s electricity sector. Subsidies that have been provided to the power sector by the Government over many years have significantly affected Government public finances, and the Government believes that substantial cost savings can be realized through a series of reforms, cost saving initiatives and structural changes to the power sector. For further information on the Suriname electricity sector, see “The Surinamese Economy – Electricity, Gas and Water Supply – Electricity.”

The following steps are part of the Government’s planned restructuring and reform of the electricity sector:

 The Government plans that substantially all of the electricity generation assets in Suriname will be consolidated under SPCS, which is indirectly 100%-owned by the Government.

 The Government expects that the Afobaka HPP will be transferred to SPCS within no more than 90 days after the closing of the offering of the Notes. Utilizing the proceeds of the offering of the Notes, the Government will pay approximately US$111 million to Suralco for arrears representing energy from the Afobaka HPP provided to the Government for which the Government has not yet paid and profits that Suralco would have generated if had continued to operate the Afobaka HPP through December 31, 2019. See “Description of the Notes – Escrow Account.” The transfer of the Afobaka HPP to the Government will be made pursuant to the Afobaka Hydroworks Transfer And Execution Agreement, which was approved by the National Assembly by Act of September 6, 2019 (Bulletin of Acts and Decrees 2019, number 96).

 The Government plans that EBS will transfer the Saramaccastraat Thermal Plant to SPCS, and that the Government will eliminate the arrears currently owned to it by EBS, which will serve to strengthen EBS’s financial condition.

 In addition, the Government plans for electricity tariffs to be increased gradually over the next five years, beginning in June 2020 in a form that will eliminate electricity subsidies by mid-2024.

See “Risk Factors – Risks Related to Suriname - Future political support for current economic policies, including reform of the electricity sector and servicing of Suriname’s outstanding public debt, cannot be assured.”

Background

As a result of increased power generation costs that have not been reflected in increases in the electricity tariffs paid by consumers, the Government has for many years supported the state-owned electricity company, EBS, primarily through subsidizing the provision of hydro-generated electricity and the provision of oil for the thermal generation of electricity. For many years consumers in Suriname had not paid market-related tariffs for electricity, and they had not been adjusted meaningfully prior to October 2015.

130 The following are the principal ways in which the Government has subsidized EBS’s power production activities:

 The hydroelectric power produced by the Afobaka HPP has been supplied by Suralco to the Government at prices that are linked to international oil prices. The Government in turn has provided this energy to EBS, which has not reimbursed the Government for the price paid by the Government to Suralco.

 EBS owns and operates various thermal electric power plants. These plants are powered by diesel fuel or heavy fuel oil provided by Staatsolie, for which EBS has not fully paid. The PPA between SPCS and EBS has specifically allowed Staatsolie to reduce tax or dividend payments to the Government by any amounts past due from EBS. This has resulted in substantial reductions in revenue received by the Government by Staatsolie and constituted an indirect subsidy.

 EBS has received a budgeted subsidy for the provision of electricity to remote areas in the interior of Suriname.

 The lack of taxation of electricity services also constitutes a subsidy.

In recognition of the structural problems in the electricity sector and as recommended by the IMF, the Government engaged Jacobs Consultancy Limited (now named Advisian and now a wholly-owned subsidiary of WorleyParsons Limited) in 2016 to conduct an operational performance review of EBS and issue recommendations for saving costs in the power generation sector. The report prepared by Jacobs Consultancy Limited (the “Jacobs Report”) included several recommendations for reforming the electricity sector, including that EBS’s transmission, distribution and supply activities be separated from its generation activities, and that a new separate generation company be responsible for the generation activities.

The Government believes that the phasing out of electricity subsidies is important for creating fiscal space, improving the allocation of public resources and the overall efficiency in the economy and avoiding new inflationary pressures and social disruption. Accordingly, the Government is in the process of implementing a phased elimination of electricity subsidies, which was announced by the President and began in October 2015. The Government nearly doubled electricity tariffs in late 2015 and implemented another increase in 2016, but electricity prices remain fixed in SRD terms, currently at approximately one-third of cost-recovery. The Government currently expects that electricity subsidies will be fully eliminated by mid-2024 as part of the broader reform of the electricity sector. For more information on the effect of electricity subsidies on Suriname’s public sector finances, see “Public Sector Finances – Electricity Subsidies” and “ – Fiscal Policy Reforms – Elimination of Electricity Subsidies.”

In addition to the importance of phasing out subsidies, the Government also believes that it is important to improve the efficiency of the electricity production sector, and that there is significant potential for cost savings based on EBS’s cost of generation. EBS reports a significant difference between the achieved operational and rated capacities. Its average energy utilization of 29-33% is below the industry target of 55-60% for HFO generator sets. Due to structural inefficiencies, low utilization, and high input costs, EBS’s cost for energy generation is the highest of the three energy generation providers in Suriname. The Government believes that, by transferring power generation assets from EBS to a separate company, cost savings can be achieved that would reduce the need for subsidies and enable tariffs to be increased to market-determined and cost-recovering levels.

Consolidation of Power Generation Assets

Consistent with the recommendations made in the Jacobs Report, the Government has decided to separate electricity production from its distribution and sales functions. The Government has decided to consolidate the production assets under a separate company, which will be SPCS, Staatsolie’s wholly-owned electricity generation company, which currently operates a thermal power plant.

131 This consolidation is planned to be effected by way of a transfer of the Afobaka HPP from Suralco to SPCS and in a second stage a transfer of the Saramaccastraat Thermal Plant from EBS to SPCS.

The Afobaka HPP is currently operated by Suralco pursuant to the Brokopondo Agreement. The Brokopondo Agreement included a concession to generate power. The Brokopondo Agreement is expected to be terminated pursuant to documentation which has been approved by Parliament. Such documentation consists of a Framework Agreement (termination of Brokopondo Agreement, transfer of dam, including employees, environmental docs), a Transition Services and a Novation and Release Agreement.

The transfer of the Afobaka HPP from Suralco to SPCS will result in an immediate decrease in electricity subsidies, as the Government will not be required to pay Suralco for power produced by the plant. The existing PPA between Suralco and EBS links the price of electricity to the price of hydrocarbons. As a result of the transfer of Afobaka HPP to SPCS and the planned entry into a new PPA, there is significant scope for savings as the costs of hydropower are lower than those of a typical thermal plant fueled by hydrocarbons.

The transfer of the Saramaccastraat Thermal Plant from EBS may be conducted in conjunction with the forgiveness of arrears owed by EBS to the Government and/or the payment of cash consideration by the Government to EBS.

Supply of Power in Suriname

Power Supply Systems

Information in this “– Power Supply Systems” subsection has been derived from the “Afobaka Hydropower Station Due Diligence” report dated October 31, 2019 prepared by Advisian (a wholly-owned subsidiary of WorleyParsons Limited) for the Republic of Suriname (the “Worley Report”).

In Suriname, electricity is supplied via three systems, which comprise two relatively large separate grids, and a third system of various smaller independent grids which are treated as a group. There are no interconnections between the systems or internationally. The two main grids are the Energievoorziening Paramaribo (EPAR) system (covering Paramaribo and the east of the country) and ENICK (covering Nickerie and the west of the country) and the third system is District Energy (DE) covering rural areas.

The EPAR system transports by far the largest amount of power produced.

According to EBS, the EPAR transmission grid is to a large extent set up as closed ring at 33 kV with 24 substations, transforming the electrical power from 161 kV and 33 kV to 12.6 kV and 6.3 kV for the distribution grids. The total length of these 33 kV distribution lines is approximately 310 km, of which 102 km is underground cable.

Power is fed into the EPAR grid from three principal sources as follows:

 Power from the Afobaka HPP is transported by a 161 kV, 74 km long, double circuit line to Paranam Substation and then onwards by a 161 kV double circuit line to Paramaribo Menckendam Substation (2 x 26.3 km).

 The SPCS power plant is connected to the EPAR (Electricity supply Paramaribo and surrounding areas) grid by a 33 kV line (from the 4 x 7.5 MW CAT generators) and a double circuit 161 kV line (from the 4 x 17 MW Wärtsilä generators).

 The EBS-owned Saramaccastraat Thermal Plant (comprising the adjacent DPP1 and DPP2 thermal power plants) is connected to the 33 kV Paramaribo sub-transmission system.

The total grid consists of 6,000 km of power lines and cables and 6,400 transformers. The transformers vary significantly in size from large 50 MVA 161/33 kV transformers downwards. 12.6 kV and 6.3 kV distribution grids feed into the various residential and industrial areas, where pole mounted, and pad mounted transformers are used to reduce the voltage to 127 and 220 volts for the consumers.

132 Power Supply Sources

Afobaka HPP

The Afobaka HPP consists of an embankment dam with a main gravity dam section on the Suriname River near Afobaka in the Brokopondo District of Suriname, together with transmission lines, an access road, bridge and saddle dams. The Afobaka HPP is the only hydropower generator in Suriname.

The maximum gross head of the dam is 46.3 meters (152 feet) and there are six turbines, each manufactured by Escher Wyss. The dam assets also include a 161 kV double circuit transmission line that connects Brokopondo to Paranam over a distance of 74 km. Based on a valuation conducted by Advisian (a wholly-owned subsidiary of WorleyParsons Limited) in September 2019, the Afobaka HPP has a value of US$310 million based on a cost approach and a net present value of US$465 million based on an income approach.

The Afobaka HPP was built in the 1960s and commissioned in 1965 for the purpose of supporting aluminum and alumina production by Suralco. Suralco, a Surinamese company that is currently indirectly 60%-owned by Alcoa and 40%-owned by Australian company Alumina Limited, has operated the dam under a concession that lasted until 2035 but it agreed to transfer the dam to the Government in 2019 because it no longer needed the plant for its own electrical supply due to the closure of their bauxite mines in December 2015. It is an condition for the transfer of the Afobaka HPP pursuant to the Afobaka Hydroworks Transfer and Execution Agreement that the Government pays the payment arrears to Suralco in connection with the PPA.

The Afobaka HPP currently supplies approximately half of the electricity used in Suriname. In peak hours, Afobaka HPP accounts for approximately 70% of the electricity supply in Suriname, because other sources do not have sufficient capacity to meet demand during such periods.

The Afobaka HPP is the largest of power station in Suriname with an installed capacity of 189MW. However, the average production is significantly lower due to water inflow being insufficient to use the installed capacity. The following table sets out electricity generation for the Afobaka HPP for the years indicated.

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Average(1) (GWh) Production 761 898 1,008 1,001 931 1,111 902 931 673 586 721 880 956 874 ______(1) Average over period 2006-2018. Source: Worley Report.

The Afobaka HPP currently supplies power to the Government via a PPA. Under current PPAs, the Afobaka HPP is to generate a minimum of 700.8 Gigawatt hours (“GWh”) per year. Of this, approximately 13 MW is supplied on average directly to Rosebel Gold Mines via a two PPAs with the Government of Suriname. The remainder is supplied to EBS, which in turn supplies another approximately 14MW to Rosebel Gold Mines with the remainder going to the general grid.

133 Saramaccastraat Thermal Plant

Information in this “– Saramaccastraat Thermal Plant” sub-section has been derived from the Worley Report.

EBS produces electricity for the EPAR grid from two adjacent power stations, named DPP1 and DPP2, located at Saramaccastraat in the Paramaribo district, as summarized in the following table.

Saramaccastraat Thermal Plant Capacity Number of Generating Sets Total Capacity of Power Plant Thermal Power Station Rated Capacity Operational Capacity (dates of units) Diesel HFO (MW) (MW) DPP1 (1977-2010) 5 8 83.5 71.2 DPP2 (2013-2016) - 4 84.0 72.0 Total 3 12 167.5 143.2

DPP1 station has only one unit remaining in operation, supplied by MAN Diesel & Turbo and with identification number 18V 32/40CD S 1065139/ BJ 2010, placed in service November 29, 2018, with an expectancy of a remaining life of one year and three months.

DPP2 station is located adjacent to DPP1 and it has four HFO generating sets. Those four units are still in operation with remaining fiscal life of approximately 15 years on average.

The generator sets of power station DPP2 are continuously in normal maintenance and so, most of its main mechanical equipment can be considered as in a good operational condition. DPP2 has four engines supplied by MAN Diesel & Turbo, type 18V48/60TS which have the following remaining fiscal lives:

 ID 1135605 BJ12, placed into service on December 26, 2013 and has a remaining fiscal life of 14 years and 4 months.  ID 11135606 BJ13, placed into service on December 26, 2013 and has a remaining fiscal life of 14 year and 4 months.  ID 1135613 BJ13, placed into service on December 26, 2013 and has remaining fiscal life 14 years  and 4 months.  ID 1135663 placed into service on March 30, 2016 has remaining fiscal life of 16 years.

EBS reports a significant difference between the achieved operational and rated capacities. EBS defines its operational capacity as the maximum capacity at which a machine can be operated on a sustainable basis, considering the state of the assets. For example, partial or incomplete repairs can lead to an operational capacity less than rated capacity.

The large difference between the rated and the operational capacities is larger on the older engines at DPP1. The de-rated capacity is attributable to:

 Cracks in two of the foundations.  Excessive vibration on engine components.  Several cracks have been experienced in the past on engine components.  Modifications performed on some units after failure. Further, one of the 5.2 MW unit (D1) was taken permanently out of service. In May 2017, EBS indicated to its Board of Commissioners (RvC) that only 35 MW of generating capacity was available at DPP1, and only 58 MW at DPP2, a relatively new plant.  For the new DPP2 machines, EBS indicates that the outage is due to the vendor’s slow delivery of relatively minor spare parts.

The EBS assets of DPP1 and DPP2 are presently being operated as peaker plants. DPP2 operates at an average of 12 hours per day with DPP1 operating at 8.8 hours. The EPAR load profile shows two peaks of roughly seven hours and three hours in their durations. Generally, for this type of operation the electricity generator receives higher

134 reimbursement per MWh, especially against a demand that is significantly above the forecast. Diesel assets typically operate best when the load is 50% or above operating capacity, which is why there are typically multiple small units rather than a small number of large units.

SPCS Thermal Power Station

Staatsolie Power Company Suriname (SPCS) is a wholly-owned power generation subsidiary of Staatsolie, which began commercial operations in 2006. SPCS owns and operates a 96 MW power generation plant comprising eight diesel generator sets located at Tout Lui Faut, adjacent to Staatsolie’s oil refinery. SPCS supplies electrical energy and steam to the oil refinery and electricity to the Government of Suriname, the latter through the grid of EBS. Approximately 20 MW of SPCS’s 96 MW capacity is dedicated to Staatsolie’s refinery, although the refinery often utilizes less than this amount. SPCS delivered 350,178 MWh to the public grid in 2018, a 4.5% increase from the 2017, and 88,299 MWh to the refinery, a 2.4% decrease from 2017 due to fluctuating refinery loads and downtimes. Overall, total power generation increased 3% in 2018 from 2017. The production in 2018 represents approximately 52% of the installed annual generating capacity of 840,960 MWh. The process steam delivered to the refinery rose from 26,042 tons in 2017 to 70,245 tons in 2018. The continuous effort to increase the reliability paid off with a significant reduction in the unplanned engine shutdowns. In 2018, SPCS was certified to be in accordance with the ISO 9001:2015 quality management standard, demonstrating our commitment to delivering power and steam with consistent quality, customer satisfaction and continuous improvement.

SPCS has a long-term PPA with the Government of Suriname for the purchase of electricity from its facility. The PPA assumes an efficiency of 1.5 bbl of heavy fuel oil per MWh. This is a low efficiency of generation, and adversely affects the cost of power supplied. The Government pays SPCS a market price for electricity. EBS then sells this electricity to the public at a lower subsidized price to consumers.

Demand for Power in Suriname

The key factors driving power demand in Suriname are: (i) construction and economic activity; (ii) industrial development; and (iii) population growth. The demand for power is heavily influenced by seasonal climate variations in Suriname. Power is supplied to large-scale projects in Suriname as follows:

 Rosebel Gold Mines purchases power for its operations from EBS pursuant to two PPAs it has entered into with EBS.

 The Merian gold mine has its own thermal power source, which is not connected to the national grid.

 Staatsolie’s oil refinery is supplied electricity by SPCS.

 Staatsolie’s Saramacca oil fields are supplied by electricity purchased at market rate from EBS.

The following table sets out information on the electricity tariff structure in Suriname as of June 2019:

For June 2019 Tariff / kWh Percentage of Percentage of clients (SRD) subsidy <= 150 kWh 24.8% 0.27 81% 151 - 300 kWh 30.5% 0.30 79% 301 - 450 kWh 20.0% 0.33 77% 451 - 600 kWh 11.0% 0.50 66% 601 - 800 kWh 7.0% 0.74 49% > 800 kWh 6.7% 1.31 10%

Cost / kWh SRD 1.45 ______Source: EBS

135 Tariffs have been structured in a sharply regressive form. Using June 2019 consumption data, electricity users can be divided in deciles from the lowest 10% of users to the largest 10% of users. The lowest decile reflects the poorest strata of the population, while the highest decile includes the richest strata of the population and most of the industrial and commercial electricity consumers. During that month, consumption amounted to 52.39 MWh, which costed US$10.11 million to generate and distribute (US$0.193/kWh). Consumers were invoiced US$3.11 million, and subsidies amounted to US$7.00 million. The lowest 25% of users (the bottom 2.5 deciles) used an average of 73 kWh per month and paid the lowest tariff of SRD 0.27/kWh. These users paid an average of US$2.79 for electricity. They receive an average subsidy of US$11.39 in June 2019. The 25% largest consumers of electricity (the top 2.5 deciles) used an average of 773 kWh per month and paid an average of US$56.53 per month for electricity. They received an average subsidy of US$92.62 per month. These users include most if not all commercial and industrial users of electricity.

Electricity Sector Reform Elements

The key elements of the Government’s planned electricity sector reform are:

 Energy sector plan: The Government’s energy sector plan was competed in 2018 and provides the road map for future development of the power sector, to ensure alignment with the vision of the Government to support the Paris Agreement and at the same time develop sustainable growth in the economy by providing sufficient electricity at an affordable price and in a sustainable manner. As part of the reform, the Energy Authority of Suriname (EAS) was formally established, although it is not yet staffed or operational. EBS began the process of separating its company into a generation and a distribution company.

 Financing: The issuance of the Notes will provide financing to support the transfer of the Afobaka HPP to the Government.

 Management of generating assets: Substantially all of Suriname’s electricity generation assets are planned to be under the control of Staatsolie via one of its subsidiaries. For this purpose, Staatsolie is finalizing a transitional management agreement with Suralco. This will ensure that the Afobaka HPP operations, including employees, insurance, IT, maintenance, procurement and related matters will not be affected by the hand-over. Staatsolie has committed to assume control via one of its subsidiaries the generating capacity of EBS within 12 months of the Notes issuance. Having all relevant generating assets under management, Staatsolie will be able to decide how to optimize generator dispatch and execute investments to add or reduce generating capacity. Dispatch (meaning which generating assets cover the base load and which ones cover the peak load), has been a problem in the past, in particular for EBS assets, and has created inefficiencies at the system level and higher operating and maintenance costs.

 Increase of tariffs: The reform will also need to include an increase in tariffs. This will be started in June 2020 with the last tariff increase in June 2024 planned to completely eliminate subsidies. In total, there are expected to be at least five tariff increases from June 2020 to June 2024. It is currently estimated that annual increases of approximately 18% will be sufficient to eliminate subsidies by mid-2024. This does not include the impact on tariffs of oil prices, exchange rate changes, efficiency gains in generation or lower demand, discussed below. The tariffs are also planned to be changed to reflect the price at which SPCS sells electricity to EBS. This is expected to be influenced by three factors:

o Oil price: The international oil price is currently the most important factor in determining the cost of electricity, as the Afobaka HPP electricity is also priced in relation to international oil prices. In the future, oil prices will still be relevant, as thermal electricity generation will comprise the majority of electricity generation for the next few years.

o Exchange rate changes: To avoid the repetition of the 2016-2017 phenomenon whereby tariff increases were effectively neutralized by exchange rate changes, it will be necessary for SPCS to consider its overall costs, including internationally priced goods, such as oil, and imported goods and services.

o Efficiency gains and cost reductions: Generation costs will decline immediately after the transfer of the Afobaka HPP as Suralco will no longer receive profits from the plant. This is expected to result in

136 significant savings annually. Going forward, SPCS is expected to be able to generate additional cost reductions through improved and centralized asset management and by gradually eliminating the more expensive, obsolete, or costly thermal generating assets. Finally, increased tariffs are going to reduce electricity demand.

The separation of generation and distribution is intended to allow EBS to concentrate on its role as a distributor, while Staatsolie will manage the generation assets. Staatsolie is planned to charge EBS cost-plus prices for electricity and will be able to increase generation capacity in a more comprehensive manner. During the next five years, there will still be subsidies in the electricity sector, as tariffs will be adjusted gradually over such period until they are fully eliminated.

Projected Reduction in Subsidies from Electricity Sector Reform

On the basis of the Government’s macroeconomic and fiscal projections, subsidies are projected to increase over time without reform. Subsidies amounted to approximately US$165.8 million (4.9% of GDP) in 2018. While the nominal amount is almost unchanged in 2019 as compared to 2018, as energy costs decreased but consumption increased, the ratio to GDP is expected to decline to 4.4% of GDP in 2019 from 4.9% of GDP in 2018. Subsidies without reform are projected to remain at approximately 4.2% of GDP over the medium term, assuming current international forecasts for oil prices, increasing demand, and a constant real effective exchange rate.

Electricity Subsidies 2015 2016 2017 2018 2019* 2020* 2021* 2022* 2023* 2024* 2025* (SRD millions) Without reform 408 487 1,009 1,253 1,260 1,313 1,375 1,477 1,607 1,728 1,831 During reform 408 487 1,009 1,253 1,260 748 572 458 357 146 0 (in percent of GDP) Without reform 2.5% 2.5% 4.2% 4.9% 4.4% 4.2% 4.2% 4.2% 4.2% 4.3% 4.3% During reform 2.5% 2.5% 4.2% 4.9% 4.4% 2.4% 1.7% 1.3% 0.9% 0.4% 0.0% ______*Projection Source: IMF (2019), EBS, Ministry of Finance, WGFP.

The following table outlines the Government’s projected reductions in electricity subsidies as a result of its planned reform of the electricity sector.

Expected Savings from Electricity Reform (Projected) 2020 2021 2022 2023 2024 2025 (SRD millions) Subsidies without reform 1,312 1,375 1,477 1,607 1,728 1,831 Subsidies during reform 748 572 458 357 146 0 Savings from owning Afobaka 414 434 456 479 503 528 Tariff increases 71 183 335 513 789 963 Efficiency gains, of which: 80 186 227 258 291 341 - Improved generation efficiency 19 37 39 41 43 45 - Lower consumption 61 148 188 217 248 296 ______Source: EBS, Ministry of Finance, WGFP.

137 Regulation of Electricity Sector

The electricity sector is regulated by the Ministry of Natural Resources. The Government (the President, Vice President and Ministers), with special input from the Minister of Natural Resources, determines the public policy on electricity.

On March 30, 2016, the Electricity Act 2016 and the Electricity Authority Suriname Act entered into force, in relation to regulation of the Suriname power sector. The Electricity Authority Suriname Act provided for the establishment of a new regulatory authority, the Electricity Authority Suriname, to whom the Government delegated the responsibilities regarding the supervision and directing of the sector. In respect of the responsibilities of EBS for transmission and generation, it should be noted that, according to the Electricity Act:

 EBS is the national transmission system operator.

 EBS is the sole supplier of electricity to end users through the national grid, but the Government also has the right to supply electricity through the national grid itself. Licensed producers and self-generating end-users are allowed to supply electricity to EBS. Producers of hydroelectric power or other kinds of power that have the potential to make a significant social or environmental impact are also allowed to supply electricity to EBS after they have entered into an agreement with the Government to do so.

 Transmission, distribution and supply of electricity is the nation-wide responsibility of EBS.

Suriname has no regulating authority for hydroelectric power or for dam safety. Dam operations, monitoring, safety inspections, maintenance and repair are conducted in accordance with the guidelines of the Federal Energy Regulatory Commission (FERC) of the United States.

138 ISSUER Republic of Suriname acting through the Minister of Finance of the Republic S.M. Jamaludinstraat 26 Paramaribo Suriname

TRUSTEE Wilmington Trust, National Association 246 Goose Lane, Suite 105 Guilford, CT 06437 United States of America

REGISTRAR, PAYING AGENT AND TRANSFER AGENT Wilmington Trust, National Association 246 Goose Lane, Suite 105 Guilford, CT 06437 United States of America

LEGAL ADVISERS To the Issuer as to To the Issuer as to United States Law Surinamese Law Morgan, Lewis & Bockius LLP Office of the Procurator-General 101 Park Avenue with the High Court of Justice in Suriname New York, New York 10178 Limesgracht #92 United States Paramaribo Suriname

To the Initial Purchaser To the Initial Purchaser as to United States Law as to Surinamese Law Greenberg Traurig LLP Naarendorp Advocaten 200 Park Avenue Cornelis Jong Bawstraat 17 New York, New York 10166 Paramaribo United States Suriname Republic of Suriname

US$125,000,000 9.875% Notes due 2023

Luxembourg Listing Prospectus

December 20, 2019

Book-Runner and Lead Manager Oppenheimer & Co.

Co-Manager Republic Bank