Reformulated IDB loan to focus on cleaner energy, better transmission infrastructure
Guyana and the IDB have agreed to a reformulated US$26.9m loan which will focus on cleaner energy among other things.
It was one of three arrangements clinched yesterday on the sidelines of the Inter-American Development Bank’s (IDB’s) consultation with its Caribbean governors. (See other story on page 3.)
Minister in the Office of the President with responsibility for finance, Dr Ashni Singh and the IDB President Ilan Goldfajn signed the US$26.9m agreement pertaining to an already existing Energy Sector Loan Agreement which has now been repurposed by the government to suit the current needs in the sector.
The general aim of the Energy Matrix Diversification and Institutional Strengthening of the
Department of Energy (ESMIDE) Program under this loan is to support Guyana’s evolving energy sector with investment in sustainable and reliable energy solutions while contributing to climate change mitigation, a release from the Ministry of Finance said.
The specific objectives are: (i) investing in sustainable/cleaner energy solutions to diversify the energy matrix in the Hinterland; and (ii) investing in the reinforcement of transmission infrastructure to improve reliability and stability of the Demerara Berbice Interconnected System and (iii) strengthening the regulatory framework and improve institutional capacity and governance of the Oil and Gas sector.
During the signing ceremony Singh pointed out that the three projects clinched yesterday reflect the Government of Guyana’s continued strong partnership with the IDB, an engagement spanning over four decades and which has resulted in the country benefitting from numerous loans under the following broad thematic areas - developing critical infrastructure, sustainable energy, natural resource management, public sector management, social sector development and private sector development.
The finance minister noted as well that the IDB has retained its position as Guyana’s largest multilateral lender and main source of external financing accounting for approximately 50% of the external debt portfolio.
“We commend the Bank for standing by us during our worst moments and for continuing to support us at this time of our development, when we still face huge challenges, despite having one of the fastest growing economies in the world,” Singh added.
Recently, the Board of Directors of the IDB approved the new Country Strategy with Guyana for the period 2023-2026 focused on resilient infrastructure, human capital development, with an emphasis on improving health and education outcomes and social services and strengthening institutional capacity. The new Strategy also supports Guyana to implement the Low Carbon Development Strategy (LCDS) and its decarbonization objectives, the release said.