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Govt. to seek another extension from World Bank to complete Petroleum Management Project
Kaieteur News-The Government of Guyana (GoG) will be seeking another extension from the World Bank to complete the US$20M loan, approved in 2019 for the Guyana Petroleum Resources Governance and Management Project (GPRGMP).
The programme’s objective is to ensure the enhancement of legal and institutional frameworks and the strengthening of the capacity of key institutions to manage the oil and gas sector.
Minister of Natural Resources, Vickram Bharrat responding to a query during the Consideration of the 2025 Estimates.
During Day of Consideration of the Budgetary Estimates, Opposition Member of Parliament, Shurwayne Holder requested an update on the programme. He also pointed out that the loan was left untouched by the Irfaan Ali-led administration for three years since 2020, before government put the resources to use. He also recognised that the remaining sum will not be used up at the end of this year.
Holder was also keen to note that this loan was initially approved for the period 2019 to 2024, but a one-year extension was subsequently granted.
With an allocation of $850M in this year’s Budget, Holder said this would take the loan used to date only up to 78%, leaving approximately 22% unspent.
In response Minister of Natural Resources, Vickram Bharrat admitted that the US$20M loan provided by the World Bank will not be exhausted this year. As such, he explained that the programme will go over to 2026. “Already we are talking to the World Bank to extend that project and not extend the project because we failed to utilize the money or we did not build out the framework,” Bharrat told the National Assembly.
To this end, he explained, “Sometimes there is the mentality that if you have a loan you have to use out the money. Mr. Speaker we are working contrary to that. The idea is not to spend out the money. The idea is to ensure we build out a framework- an architecture- to manage the sector in a very cost-effective way and I can tell you that every new framework that is in place…has already brought significant changes in the way in which we manage the sector in a very prudent manner.”
He said that while government could have utilized the funds, building out an efficient framework was key. As such he committed to extending the loan to meet the government’s objectives to manage the sector.
Earlier, the Minister informed the House that under a $1M World Bank grant, government has achieved training of Guyanese to work in the petroleum sector. Bharrat also pointed to the legal and regulatory framework that has since been put in place by government, including a new Petroleum Act and improved Production Sharing Agreements (PSAs), which will apply to new oil blocks.
In August 2023, it was reported that government convinced the World Bank to restructure the US$20M loan. The crux of the restructuring involves an extension to the project’s closing date, pushing it from its original date of March 30, 2024, by a substantial 21 months. Consequently, the revised deadline will be December 31, 2025.
Kaieteur News understands that the project has four components. Component A: Enhancement of Legal Framework and Stakeholder Engagement: (US$3.20M); Component – B Capacity Building of Key Institutions (US$10.70 M); Component – C. Enhancement of Fiscal Management Systems (US$3.50 M); and Component – D. Project Management & Project Preparation Facilities Cost ($2.60 M).
(Govt. to seek another extension from World Bank to complete Petroleum Management Project)
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