Guyana utilizes 45% of US$20M World Bank loan to boost oil sector capabilities

Jul 23, 2023 ExxonMobil, News, Oil & Gas

Kaieteur News – The World Bank recently disclosed that Guyana has utilized 45 percent of a US$20M loan that was approved back in 2019 to help the country increase its legislative and regulatory capabilities for the oil sector.

In the latest Implementation Status and Results Report published on June 23, 2023, the financial institution said US$8.59M has been disbursed while the balance is outstanding for use. The loan which was signed off in April 2019 is expected to close by March 2024.

Kaieteur News understands that the project’s performance was discussed by bank officials and they agreed on a series of actions to address areas of lagging performance and to align the project’s remaining activities with the Government’s current priorities.

These include the allocation of project resources to support supplementation to the sector’s legal and regulatory framework that includes the Environmental Protection Agency (EPA), the Guyana Extractives Industry Transparency Initiative (GYEITI) Secretariat, and the Natural Resource Fund (NRF). The bank also said recent progress in procurement implementation is “encouraging.”

In light of the findings of the Mid-term Review, the government’s project ratings have been upgraded. This newspaper observed that Guyana moved from a rating of “Moderately Unsatisfactory” to “Moderately Satisfactory” in the areas of “Progress towards Achievement” and “Overall Implementation Progress.”

The US$20M loan comprises four components. They are as follows:

· Component- A: Enhancement of Legal Framework and Stakeholder Engagement(Cost $3.20 M)
· Component – B: Capacity Building of Key Institutions(Cost $10.70 M)
· Component – C: Enhancement of Fiscal Management(Cost $3.50 M)
· Component – D. Project Management & Project Preparation Facility:(Cost $2.60 M).

Under Component A, the 2022 audited financial statements note that the bank financed the provision of technical assistance through third-party expertise for the preparation of Guyana’s 2019 EITI Report to improve stakeholder engagement in the governance and oversight in the oil and gas sector. As of December 31, 2022, 44% of this component’s budget was spent.

During the year under review, it was noted that the bank financed the provision of technical assistance support, advisory services, and the purchase of key software through third-party expertise to enhance the government’s capacity to effectively manage the oil and gas sector and capacity-building of key staff involved in the management of the sector. This was done through the financing of a needs assessment consultancy to support petroleum data management and the purchase of key legal, analytical geoscience, and reservoir engineering software, together with capacity building in the use of the software. As of December 31, 2022, 67% of this component’s budget was spent.

It should be noted that Component C, which deals with enhancing Guyana’s fiscal management, through designing the enterprise architecture for an integrated financial management system to allow for more effective management of public finance and carrying out capacity-building activities to enhance the Ministry of Finance’s (MOF).

It also covered macro-economic management and fiscal analytical capacity, and capacity to support the Macroeconomic Committee and Investment Committee for the Natural Resource Fund. During the year under review, based on the priorities of the Ministry of Finance, no procurement activities were recommended under this component by the beneficiary agency.

The Audited Financial Statements also revealed that all financial management and procurement activities of the project titled “Guyana Petroleum Resources Management and Governance Project (GPRMGP)” were carried out and managed in accordance with the provisions, guidelines, and standards set out in the Project Operations Manual (POM).

“It should be noted that cumulative expenditure for Component D has exceeded the budgeted amount by US$56,821. The project is currently going through a Mid Term Review and is ratifying allocations of components and sub-components with the Bank,” the statements said.

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approved, capabilities, loa, oil, sector, World Bank

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