The Inter-American Development Bank (IDB) Group has signed six new agreements with Guyana for both Public and Private Sector partnerships, further cementing ties between the two parties for the country’s continued growth.
The signings took place during the IDB Group’s XII Annual Consultation with Caribbean Governors of the IDB in Guyana on Saturday.
Representatives of various banking institutions and officials from the IDB
The agreements include two operations with the Government to improve the country’s education sector by enhancing education quality and infrastructure. The third caters for an amendment to a current operation to strengthen Guyana’s energy matrix diversification and reliability.
Additionally, IDB Invest, the Private Sector arm of the IDB Group, signed three operations with companies in Guyana for financing in the logistics sector, tertiary education, and sustainable tourism. Private stakeholders in this arrangement are Texila American University Guyana; Republic Bank; Muneshwers Limited; the Guyana Bank for Trade and Industry (GBTI) and Caribbean Green Building.
IDB President Ilan Goldfajn said, “Today’s signings are an important step in our continued collaboration with the Government to improve the lives of the Guyanese people. We are confident that these projects will make a difference in improving education conditions, increasing energy reliability and financing sustainable tourism, tertiary education, and logistic sectors.”
Education and energy
In education, close to 9000 primary school students and their communities will benefit from a Conditional Credit Line for Investment Projects (CCLIP) for transforming Guyana’s education sector and the first individual operation for support for educational recovery and transformation.
The CCLIP enables Guyana to access up to US$150 million of which the first operation is for US$90 million.
With this investment, over 2600 students are expected to benefit from the construction of six new primary schools and more than 6000 students in 19 primary schools in the hinterland regions will see their schools rehabilitated. Additionally, 7000 students and 300 teachers from Grades Two to Six in the selected schools will receive digital devices to enhance teaching and learning experiences.
An investment grant for a total of US$5 million will strengthen instructional leadership at the district and school levels, with financing from the Global Partnership of Education (GPE).
It will complement the educational support by enhancing leadership capabilities among 200 education leaders, spanning district and school leadership, Ministry officials, and subject specialists. The operation aims to contribute to improved quality, equitable participation, and achievement in basic education for the sustainable development of Guyana.
Meanwhile, the amendment to strengthen the energy matrix diversification agreement will cost US$26.9 million. It will benefit more than 200,000 persons, about 90 per cent of the Guyana Power and Light Inc customer base on the Demerara-Berbice Interconnected System (DBIS).
The modification uses approximately 63 per cent of the funds to focus on reliability of electricity supply by replacing and upgrading two existing 12-kilometre 69-kilovolt (kV) transmission lines, and installation of capacitor banks to reinforce four power substations over the next three years.
Private Sector support
In the Private Sector, IDB Invest partnered with GBTI to finance US$14 million for Muneshwers Limited to purchase two new gantry cranes for multipurpose cargo activities and to build a logistics warehouse.
The cranes will be installed at Port Georgetown and will enable Muneshwers to double its cargo handling capacity by 2025, from the current 30,000 20-foot equivalent unit containers per year.
This operation includes a senior loan of US$10 million from IDB Invest and US$4 million from GBTI. It is Muneshwers’ second facility with IDB Invest, which provided a US$4 million loan in 2022 for the company to acquire its first mobile harbour crane.
IDB Invest also partnered with Republic Bank (Guyana) Limited to help Texila American University enhance services in Guyana by expanding its accommodation facilities for staff and students.
This is IDB Invest’s first Private-Sector education project in the Caribbean. Total financing of US$9 million includes a senior loan of US$5 million from IDB Invest and US$4 million from Republic Bank. This investment is expected to increase student enrolment by almost 73 per cent and by 2026, increase the number of students graduating by 20 per cent.
Sustainable tourism
Additionally, IDB Invest partnered with Caribbean Green Building to provide US$22 million in financing to develop a sustainable mixed-use tourism project consisting of a 172-room Four Points by Sheraton Hotel, a conference facility and retail in Georgetown, Guyana.
The project will be the first EDGE advanced-certified hotel in Guyana and is expected to contribute to the economic development of the country by generating tourism revenue, creating more than 150 jobs during construction and over 60 jobs during operations, and strengthening the local value chain.
Funding
Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh underscored the Bank’s reliability as a development partner over the years from the time Guyana joined the bank in 1977 to now, with over US$2 billion worth of support for Public Sector operations approved.
“We remain today firmly focused on delivering improvement to the lives of all of our citizens in the shortest possible time, ensuring that we build resilience for the medium and long term by diversifying our economic base and improving our competitiveness across all sectors; and remaining at the forefront of both fiscal and environmental sustainability,” he underlined.
Dr Singh added that the IDB has been an important source of financing for Guyana’s rapidly-growing and diversifying Private Sector where through IDB Invest, US$177 million was disbursed since 2020.
“This brought to an end the drought of Private Sector approvals that preceded 2020 and is a tangible response by the Bank to the Government’s long-standing call for ramped-up support by the Bank and other multilateral and regional development banks through their Private Sector windows to the Guyanese Private Sector,” Dr Singh added.
He further noted that this consultation provided an important opportunity for stakeholders to discuss the future strategies and goals of the IDB Group as reflected in the new institutional strategy of the Bank.
He encouraged the IDB to pursue innovative approaches towards mobilising and leveraging capital for both Public and Private Sector operations to build greater resilience in the Caribbean.
“We particularly look forward to discussing the regional development plan by the bank under the very appropriate banner of One Caribbean, which especially resonates with us in Guyana as we pursue ourselves the goal of One Guyana. This plan is timely if not overdue; we have long called for the bank to develop a specially-targeted sub-regional plan or strategy for the Caribbean given the very peculiar circumstances and challenges faced by the Bank’s smallest and most vulnerable member states,” Dr Singh stated.
