IDB, India EXIM Bank financial agreements laid in National Assembly

…to account for education reform, energy & Dornier aircraft financing

In keeping with its commitment to transparency and accountability, the Government on Friday laid a number of agreements in the National Assembly during the 82nd Sitting of the 12th Parliament.
Senior Minister in the Office of the President with responsibility for Finance, Dr Ashni Singh rose to present these financial agreements to the House. They include a US$150 million conditional line of credit with the Inter-American Development Bank (IDB), for spending in the education sector.
Two other IDB contracts, namely a line of credit of US$90 million, financed through the previous agreement, and a revised loan to finance energy diversification, were also presented to the House.
Additionally, there was a line of credit of US$23.3 million from the Indian Export Import (EXIM) Bank to procure the two Dornier aircraft that arrived earlier this year. Finally, there was a US$2.5 million line of credit, also with the Indian EXIM Bank, for a solar power plant at the Cheddi Jagan International Airport (CJIA).
In a statement on Friday, the Finance Ministry went into detail about these financing agreements, which it noted would provide new sources of financing, while maintaining the People’s Progressive Party/Civic (PPP/C) Government’s “sterling track record of transparent, accountable, and prudent debt management”.
When it comes to the US$150 million agreement, this is for a Conditional Credit Line for Investment Projects (CCLIP) that was signed on February 23, 2024 with the IDB. So far, one loan has been processed from this line of credit, to the tune of US$90 million to finance the Educational Recovery and Transformation Programme 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 19 existing primary schools and the construction of six new primary schools. It also allows for improvement in the learning environment by integrating digital technologies at these schools to the benefit of over 8000 primary education students and their communities.”
According to the Ministry, the newly-constructed schools will provide an additional 2610 new primary education spaces, while at least 7341 students and 352 teachers from Grades 2- 6 will receive digital devices.
Meanwhile, an amendatory loan was also signed on the same day as the CCLIP with the IDB, to revise an original loan the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had signed in February 2019, for the “Energy Matrix Diversification and Institutional Strengthening of the Department of Energy (ESMIDE) Programme.”
“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) Programme 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 Ministry explained.
Among the specific objectives are investing in sustainable/cleaner energy solutions to diversify the energy matrix in the hinterland; investing in the reinforcement of transmission infrastructure to improve reliability and stability of the Demerara Berbice Interconnected System and strengthening the regulatory framework and improve institutional capacity and governance of the oil and gas sector.
Meanwhile, two line of credits were contracted with the Indian EXIM Bank. One of them is a Dollar Credit Line Agreement, which was signed between the Government of the EXIM Bank of India for US$2.5 million to finance the installation of a Solar Photovoltaic 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 minimise carbon emissions.
The other is a US$23 million to finance the procurement of two Hindustan 228-201 aircraft from Hindustan Aeronautics Ltd. The agreement, according to the Ministry, represented Government’s ongoing efforts to ramp up the capabilities of the Guyana Defence Force (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 Finance Ministry said. (G3)