Govt. goes to IDB for US$244M

Mar 03, 2022 News

…loans to fund road, healthcare, energy projects

Kaieteur News – The PPP/C Government has approached the Inter-American Development Bank (IDB) for US$244M ($48.8B) in loans to fund major projects in the health, road and energy sectors.
According to the IDB, it is reviewing documents for the approval of US$160M for Guyana to strengthen its health care network by expanding access and improving the quality of health services countrywide.
It is also considering approval for US$350,000 to support Guyana with the development of road projects along with the strengthening of public sector capacity to overcome critical project issues (particularly socio-environmental and climate resilience aspects). That money would also be used to help government manage its new public investment agenda. The IDB further stated that the purpose of the loan is to help create capacity and assist a local counterpart technical team within the Ministry of Public Works to lead project preparation in socio-environmental aspects, gender, project engineering and traffic management services.
Guyana is also expected to benefit from a US$83.5M IDB loan to support the diversification of the country’s energy matrix via the use of cleaner and renewable energy sources. The specific objectives of the programme are to lower the cost of electricity generation while supporting the country transition towards renewable energy-based generation; and improve the operation and reliability of the isolated systems of Essequibo and Linden. It would also support the development of local skills for services related to solar PV generation systems.
Speaking to the importance of the energy project, the IDB was keen to note that Guyana has one of the lowest electrification rates within CARICOM member states. The financial institution noted that just below eighty percent (80%) of the population has access to electricity, which therefore leaves them facing enormous challenges related to rural electrification and/or energy poverty.
Furthermore, the Inter-American Development Bank (IDB) highlighted that it has over the years approved over US$37.6 million in loans and has also secured approximately US$26.9 million in non-reimbursable investment financing from the European Union (EU) in an effort to boost the reliability and efficiency of Guyana’s electricity sector through improvements in operational capabilities, electricity loss reduction measures, as well as strengthening corporate performance and management of the country’s utility i.e. Guyana Power and Light Inc. (GPL).
The financial institution said reducing electricity losses can improve GPL’s financial performance, while at the same time alleviating fiscal commitments of the Government of Guyana in relation to the electricity sector. During the next decade, the IDB said a significant increase in electricity consumption is expected in Guyana as a result of growth of the residential and commercial sectors as well as the expected return of large customers to the national power grid. With projected energy demand expected to double in 10 years’ time, the IDB agreed that diversifying Guyana’s energy matrix is important for supply to meet demand.
It is against this background that the Government of Guyana through support from the Inter-American Development Bank is investing in solutions along the path to a cleaner and diversified energy matrix, beginning with innovative solutions for energy security and reliability for communities that promise great growth during the following years.

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