A Memorandum of Understanding (MoU) was signed on Thursday between the Government of Guyana and Demerara Bank which will see the establishment of a $900 million revolving fund to finance investments in the forestry sector and promote value added.
An important element of the fund is to ensure that small loggers, sawmill operators, and other stakeholders in the forestry sector, who previously found it difficult to secure commercial loans, are not granted easy access to financing.
Demerara Bank will contribute $600 million to the fund while the government will put in the remaining $300 million but together, they have agreed that the interest rate will be capped at four per cent.
Back in October 2022, President Irfaan Ali announced that the fund was being established during a stakeholder consultation at the Guyana Forestry Commission (GFC).
His hope is that the monies to be unleashed in the market will boost production to meet the demand, particularly for value-added products.
Demerara Bank noted its interest to support the government’s vision and on Thursday, its General Manager Dowlat Parbhu signed the agreement along with Finance Minister Dr. Ashni Singh in the boardroom of the ministry’s Main Street, Georgetown location.
Parbhu, during remarks, applauded the initiative and said the bank was committed to offering diversified credit to ensure the development of all sectors in Guyana.
“Today is a good day where Guyana sees the commitment of the government and private sector to ensure indigenous sectors are not left behind,” he said while reminding of the bank’s Farmers Credit Line set up earlier this year.
“Our mission and vision are to empower people and this credit will be given to those who could not negotiate a commercial line of credit,” the General Manager said.
Dr. Singh praised the bank for the “highly concessional rate” offered and said the forestry sector continues to play an important role in the economy.
“This is to ensure we secure a vibrant non-oil sector… we are firmly committed to sustainable forest management,” the Finance Minister said.
He too noted the emphasis on ensuring there is the production of value-added products by local stakeholders in the industry.
Natural Resources Minister, Vickram Bharrat, along with representatives from the Forestry Commission, the Guyana Manufacturing and Services Association (GMSA) and other private sector entities witnessed the signing.
Bharrat said the loan was important because of the inability of a bankrupt commission to support the industry and more so, to respond to the needs of stakeholders to access financing.
“Now, there is greater access to finance for small loggers and sawmillers and the forestry sector will be restored and returned to its former glory days,” he said.
Through a partnership with the Ministry of Natural Resources and the Guyana Forestry Commission, a committee was set up to ensure operators and other stakeholders operate by the relevant guidelines and regulations.
The intervention is in keeping with the PPP/C administration’s commitment to supporting the sector and ensuring its full potential is realised.
