Guyana REDD+ Investment Fund: US$83.3M agreement signed with IDB for countrywide solar energy programme

…money derived from previous LCDS funds for climate services

Guyana has inked a US$83.3 million agreement with the Inter-American Development Bank (IDB) for funding that will go towards a countrywide solar energy programme, using funds Guyana got from Norway under the previous Low Carbon Development Strategy (LCDS).

Finance Minister, Dr Ashni Singh (left) and IDB Infrastructure Manager Ariel Yepez-Garcia following the signing of the agreement. Also in picture is Resident Representative of the IDB (ag), Lorena Solorzano-Salazar

The agreement was signed on Tuesday at the Finance Ministry, between Senior Minister in the Office of the President with Responsibility for Finance, Dr Ashni Singh and acting Resident Representative of the IDB, Lorena Solorzano-Salazar.
The agreement paves the way for investments in eight utility scale photovoltaic solar projects totalling 33 MWp to bring affordable and clean energy to targeted communities in Guyana, under the Guyana Utility Scale Solar Photovoltaic Programme (GUYSOL).
“The US$83.3 million being used for this programme is part of the US$220.8 million earned by Guyana for forest climate services through its partnership with Norway during the previous People’s Progressive Party/Civic’s (PPP/C’s) term in office,” a statement from the Ministry explained.
It was pointed out that then President Bharrat Jagdeo had spearheaded and implemented the LCDS. Over the course of 2009 to 2015, Guyana earned US$212.52 million in forest service payments from Norway.
“The earning from Norway has since been invested in several key adaptation and socio-economic projects identified as part of the LCDS and which have benefited Guyanese all across the country,” the statement said.
“Some of the projects include the Micro and Small Enterprise Development project; Amerindian Land Titling, The Amerindian Development Fund, the Cunha Canal Adaptation, Sustainable Land Development, Monitoring, Reporting and Verification; and ICT Access and e-Services for Hinterland, Poor and Remote Communities.”
Prime Minister, Brigadier (retired) Mark Phillips, who has responsibility for energy and was present at the signing, pointed out in the release that the programme, once implemented, will benefit thousands of persons in the country including women in rural areas. He also reminded that it will assist GPL in decreasing fossil fuel use and moving to a greater use of renewable energy.
“So, it is a transformative project for Guyana. We are thankful that the IDB has been working side by side with Guyana to utilise this money that was lying in an account for over six years and we are thankful for them bringing us to the stage at which we are,” the Prime Minister said.

Meanwhile, the Finance Minister reflected on the history of the LCDS through which the finance for the project was secured. He referred to the Guyana Reducing Emissions from Deforestation and forest Degradation (REDD+) investment fund and the fact that the US$83.3 million comes from this source.
“This amount was in fact intended originally as Government’s contribution to the Amaila Falls Hydro Power Project. We had at that time a major investor, the Blackstone Group who was willing to do the Amaila Falls Hydro Power Project, but political events intervened as a result of which that project was stalled and ultimately derailed and for more than five years, these resources ended up being parked in the IDB,” Dr Singh explained.
Meanwhile, Solorzano-Salazar was optimistic that the agreement would help to take Guyana to 19 per cent renewables in the grid within three years. As such, she described this as an important milestone.
Among the objectives of the agreement is to lower the cost of electricity generation, while supporting Guyana’s transition towards renewable energy. It will also improve the reliability of the electrical grid in Essequibo and Linden.
The investments to be made into the solar photovoltaic plants include a 10 MWp of generation capacity connected to the Demerara-Berbice Interconnected System (DBIS) in the Berbice Area; an 8 MWp in the Essequibo Coast Isolated System, including a Battery Energy Storage System (BESS) with a minimum capacity of 12 MWh and a 15 MWp plant connected to the Linden Isolated System, inclusive of a BESS with a minimum capacity of 22 MWh
“Each facility will be connected to the 13.8 kV primary distribution network in the respective areas. The programme will provide 27,000 households with affordable, clean energy and is expected to benefit over 70,000 households,” the Ministry said.
The LCDS was first launched on June 8, 2009, with the revised version being published in May 2010. This version was subsequently launched in March 2013. The new draft is intended to continue building upon the work started in 2008.
Money from the LCDS has since created low-carbon jobs; enabled Amerindian villages to receive legal titles for communal lands; rehabilitated the Cunha Canal to protect against flooding; and started to equip Amerindian and hinterland communities with renewable energy, digital infrastructure, and sustainable livelihood opportunities.
A new LCDS 2030 has meanwhile been ratified in the National Assembly. It seeks to create a new low-carbon economy in Guyana by establishing incentives which value the world’s ecosystem services, and promote these as an essential component of a new model of global development with sustainability at its core. In Guyana’s case, it is about harnessing the value of the country’s ecosystem services to build a long-term, low-carbon diversification opportunity.