Guyana looking to unlock US$135M climate funds by year-end – President Ali

With Guyana set to undergo massive economic transformations, President Dr Irfaan Ali said his Government is looking to unlock some US$135 million in climate-related funds that are stalled overseas by the end of this year to finance Guyana’s sustainable development.
The Head of State made this disclosure during a recent address to the Private Sector Commission (PSC), where he reminded that Guyana also has a global responsibility.
“While our focus is on advancing our economy, it is important and critical to understand that this must be done in a sustainable way,” he posited.
As such, President Ali noted that Guyana will be using the funds it earned for sustaining its rainforests in order to absorb global carbon emissions, to finance its development.
Guyana has earned more than US$250 million via the ground-breaking forest partnership agreement with Norway under the Low Carbon Development Strategy (LCDS) initiative, which was the brainchild of former President and now Vice President Bharrat Jagdeo. However, the country has been unable to access the outstanding funds due to the political instability under the previous A Partnership for National Unity/Alliance for Change (APNU/AFC) Government.
But according to Ali, “By the end of this year, we’ll put measures in place to unlock almost US$135 million that we’re yet to receive, and going forward, we are already targeting new initiatives with higher value markets to be a major player in the carbon markets.”
The Head of State noted that these new initiatives will have the potential of earning the country hundreds of millions of US dollars annually.
With the current PPP/C Government aiming to implement Phase Two of the Low Carbon Development Strategy (LCDS), it has already re-engaged the Kingdom of Norway, which was the source of the funding.
VP Jagdeo is leading the efforts in this regard and according to President Ali, only Thursday last Guyana signed a pact that places the country ahead of everyone else in this regard.
The LCDS initiative was the first for a developing country and the third-largest agreement in the world at the time.
At a press conference last year, Jagdeo had said the LCDS would be the main document guiding Guyana’s climate actions. He had also said that the LCDS would also be expanded in the areas of biodiversity, water management and other sectors.
The Vice President had added that the Government was creating a coordinated and efficient mechanism to deal with all climate and environment-related issues. In this regard, the Government had merged the Office of Climate Change and the Department of the Environment.
Guyana had, in 2009, signed with Norway a historic forest protection accord aimed at Guyana receiving payments for sustaining its rainforests to absorb global carbon emissions. A total of US$250 million was to be paid to Guyana over a five-year period.
However, Finance Minister Dr Ashni Singh during the presentation of the 2021 budget in February had explained that the former Government’s mismanagement and then the protracted political crisis from when the coalition fell to a No-Confidence Motion in 2018, led to outstanding funds not being released to Guyana by Norway.
“When the APNU/AFC Government came into office, they squandered whatever funds were available, and brought the release of the rest of the funds already earned by Guyana to a halt. This culminated in the last payments from Norway being suspended,” the Finance Minister had said.
He added, “On top of this lost opportunity, a successor Guyana-Norway agreement for the period from 2015 to 2020 never materialised. Almost US$30 million for existing projects has not been disbursed. More than US$135 million that was earned by Guyana is sitting in bank accounts outside our economy.”
Nevertheless, Natural Resources Minister Vickram Bharrat subsequently told reporters in March that Government is already in talks with Norway to start Phase Two of LCDS, which was renamed the Green State Development Strategy (GSDS) by the APNU/AFC regime.
“We’ve already re-engaged Norway so that we can start Phase Two of the LCDS programme. We know the LCDS programme was replaced by what was called the Green State Strategy. I’m not sure how much benefits it yielded for Guyana,” Bharrat had stated.
When it comes to Guyana’s current management of its forest resources, the Minister had revealed that Guyana is way ahead of many other countries. He cited Guyana’s neighbour to the East, Suriname.
“I’m happy to say that we probably have the best forest coverage presently among forest producing nations. We have one of the best sustainable forestry system or harvesting in Guyana. It’s something that is probably second to none,” Minister Bharrat indicated last month.
“Suriname, our neighbour, another forest producer country, we’re way ahead of Suriname in terms of how we manage our forestry activities. It is a model that has been working for us over the years and we will continue to use and improve it, so we protect our forests and wildlife at the same time we are producing,” he added.
One of the hallmark projects under the LCDS initiative was the Amaila Falls Hydropower Project (AFHP), which would have used US$80 million in funding from the LCDS. However, the project was torpedoed by APNU/AFC while they were in the combined Opposition and was eventually scrapped after the coalition took office in 2015.
Now, the PPP/C Government is keen on reviving the AFHP, which is expected to add some 165 megawatts of power to the national grid, thus providing clean and reliable energy.