Guyana gets US$32.9 million for agriculture, power sector projects

The Inter American Development Bank

GEORGETOWN, Guyana, April 10, 2008 – The Inter-American Development Bank (IDB) and the Guyana government have reached agreement on a multi-million dollar aid plan to improve the country's agriculture and power sectors.

Finance Minister Dr Ashni Singh and IDB President, Luis Alberto Moreno signed two agreements valued US$32.9 million in Miami.

The Loan Agreements are for the Agricultural Export Diversification Programme and the Power Sector Support Programme.

The released agriculture project will cost the government US$21.9 million, of which US$20.9 million will be financed from resources of the IDB and US$1 million from local counterpart resources.

The main components are private sector entrepreneurship into agribusiness, agribusiness export and facilitation services, strengthening consolidating agricultural health and food safety services and drainage and irrigation rehabilitation.

In relation to energy, a release issued by the Ministry of Finance indicated that "the government saw the need to further strengthen the power sector through the Power Sector Support Programme which would result in a series of policy reforms aimed at promoting a more sustainable and efficient energy sector".

This will be financed through a US$12 million policy-based loan disbursed in three tranches.

The reforms to be undertaken are institutional, legal and regulatory reforms, including updates to the Electricity Sector Reform and Public Utilities Commission (PUC) legislation; updates to the Guyana Power and Light (GPL) licence to address tariff  structure and rate of return; preparation of an energy sector policy which addresses evolving issues such as skyrocketing fuel prices; and development of a strategic plan for the PUC which clearly establishes enforcement mechanisms.