Gov’t presents five external loan agreements to Parliament

-financing for procurement of Hindustan aircraft; transformation of educator, energy sectors

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See below full statement from the Ministry of Finance:

The Government continues with its well-crafted and multi-pronged development agenda, aimed at transforming and delivering an improved quality of life to all Guyanese, which will require new financing, while maintaining its sterling track record of transparent, accountable, and prudent debt management.

In line with this transformational agenda and sustainable debt management, five External Loan Agreements that will assist in financing a number of developmental initiatives presented to the National Assembly on Friday.

The Agreements were presented by Senior Minister in the Office of the President with Responsibility for Finance and the Public Service. Not only will these External Loan Agreements provide financing for new projects, but they will also provide enhanced financing for existing projects, already under implementation by the administration to benefit Guyanese across the country.

 

The External Loan Agreements presented on Friday comprise:

Loans from the Inter-American Development Bank (IDB):

*On February 23, 2024, the Government established with the IDB a Conditional Credit Line for Investment Projects (CCLIP) for an amount of US$150 million. The CCLIP is to be used for Transforming Guyana’s Education Sector. Under the CCLIP, one loan has thus far been processed for an amount of US$90 million to finance the first individual operation for the Support for Educational Recovery and Transformation Program in Guyana. This Project’s general objectives are to contribute to the development of the human capital needed to manage and drive economic growth and diversification (as outlined in Guyana’s National Development Plan), expand and improve access to safe and improved learning environments in selected schools as well as expand and improve educational services for vulnerable students. The investment will support the upgrading of at least nineteen (19) existing primary schools and the construction of six (6) new primary schools. It also allows for improvement in the learning environment by integrating digital technologies at these schools to the benefit of over 8,000 primary education students and their communities. The newly constructed schools will provide an additional 2610 new primary education spaces, while at least 7,341 students and 352 teachers from Grades 2 – 6 will receive digital devices. To achieve the objective of this Project the Government will put in place the following:

(a) Creation of improved physical and digital learning spaces;

(b) Improving the quality of services for vulnerable and Special Educational Needs and Disabilities students

 

*On February 23, 2024 as well, the Government and the IDB signed an amendatory loan agreement to revise an original loan contracted on February 11, 2019, to finance the “Energy Matrix Diversification and Institutional Strengthening of the Department of Energy (ESMIDE) Program”. The US$26.9 Million agreement was an already existing Energy Sector Loan Agreement (approved in the past by the Bank) but was reformulated and repurposed by the current administration 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.

The specific objectives are:

(i) investing in sustainable/cleaner energy solutions to diversify the energy matrix in

the Hinterland;

(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.

 

*In October 2023, the Government requested several amendments to the original Program which were approved by the IDB, these included the following:

(a) A change in the name of the Program from “Energy Matrix Diversification and Institutional Strengthening of the Department of Energy (ESMIDE) Program” to “Strengthening the Energy Matrix Diversification”;

(b) Reallocation of financing amounts for the various components of the loan, as well enhancing the local counterpart financing by US$5.8 million

 

Loan from Export-Import (EXIM) Bank of India:

*Guyana is a global leader in the effort to combat climate change, with the PPP/C Government’s commitment within the framework of the LCDS 2030 to tackle the climate crisis while simultaneously fostering and accelerating broad-based and sustainable growth. Government continues to make significant investment focused on environmental protection, preservation of biodiversity and promotion of renewable energy and ‘green’ technologies. In line with this agenda, on February 29, 2024 a Dollar Credit Line Agreement was signed between the Government of the EXIM Bank of India for US$2.5 million to finance the installation of a Solar Photo Voltaic Power Plant at the Cheddi Jagan International Airport. The power plant falls under Government’s efforts to transition from fossil fuel use to renewable energy in order to minimize carbon emissions.

 

*On March 15, 2024, another Dollar Credit Line Agreement was signed between the Government and the EXIM Bank of India for US$23 million to finance the procurement of two Hindustan 228-201 aircrafts from Hindustan Aeronautics Ltd. The agreement represented Government’s ongoing efforts to ramp up the capabilities of the GDF, and originated following President Ali’s visit to India’s state-owned aerospace and defence company – Hindustan Aeronautics Limited, in January 2023. Government has been investing heavily in strengthening the capabilities of the GDF and in particular, some of its specialised wings, such as the Air Corps and the Coast Guard. The purchase of the two aircraft forms part of the biggest investment in the capitalisation of the force thus far.

The PPP/C Government has reiterated its continued commitment to ensure fulfilment of all of its promises of a brighter and better future for all Guyanese, while maintaining its track record of transparent and prudent debt management.

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