Vice President Dr Bharrat Jagdeo has lamented on the slow process at the Inter-American Development Bank (IDB) for Guyana to access the remaining revenues earned from its 2009 forest protection deal with the Kingdom of Norway.
In 2009, Jagdeo, who was the President and spearheaded this ground-breaking deal, signed a US$250 million agreement with Norway for Guyana to preserve its forest in order to offset global carbon emissions.
Guyana was expected to reduce its deforestation rate and meet a number of other benchmarks in order to cash in from the arrangement.
Based on that forest protection accord with Norway, the monies earned would be kept in the Guyana REDD+ Investment Fund (GRIF).
The IDB was named custodian of the GRIF and as a result, Guyana had to seek IDB’s approval to spend the monies it earned, which were expected to be invested in the country’s low carbon development, financing renewable energy, flood protection, green job creation, as well as land titling and development of funds for Indigenous peoples.
However, while the country has already received majority of the earnings from the Norway deal, Jagdeo, who now serves as Vice President in the current People’s Progressive Party/Civic (PPP/C) Administration, disclosed the burdensome process to access some US$85 million it has remaining at the IDB.
“We have US$85 million sitting, since 2010, in the Inter-American Development Bank. We are now trying, for the last year and a half, to get our solar project launched to get it going and we have to go through two sets of processes [at the IDB]. We thought this is money we earned already [but] now we have to go through the IDB process and another set of processes just to access our own money that we want to go to bid for to put in solar farms in Linden, and in Essequibo and in Berbice,” he contended.
Only back in June 2022, the Guyana Government signed a deal with Norway and the IDB for a 33-megawatt (MW) solar power project, under the Guyana Utility Scale Solar Photovoltaic Programme (GUYSOL) initiative, to be financed by US$83.3 million – monies earned from that forest protection accord.
Initially, this US$83 million was earmarked for the Amaila Falls Hydro Power Project, which was voted down in the National Assembly by the APNU/AFC and left languishing for five years under the coalition rule.
However, when the PPP/C returned to office in August 2020, efforts were made to revive the 165 MW initiative and China Railway Group Limited was selected to construct the project after it was retendered. Negotiations for what should have been a US$700 million contract were abandoned by Government after the Chinese company experienced difficulties financing the project under the Build-Own-Operate-Transfer (BOOT) model.
Nevertheless, the monies will now be invested in the construction of several solar power initiatives including a 10 MWp of generation capacity connected to the Demerara-Berbice Interconnected System (DBIS) in the Berbice Area; an eight MWp in the Essequibo Coast Isolated System, and a 15 MWp connected to the Linden Isolated System.
However, even as Government inked a subsequent agreement with the IDB in September last, VP Jagdeo said the process is too slow at the IDB.
“Their procedures are notoriously slow. It’s not that they’re saying anything but you almost have to jump through hoops to get through their procedures. They treat it like a regular loan but it’s our money [and] you were supposed to only ensure transparency in its use not to have just justify using our own money again.”
“I must say that our experience with that has been a really terrible one, using the multilaterals [and] the intermediate funds because our experience in the last 10 years show that many of them are not ready to intermediate climate funds,” he explained.
Further, the Vice President went on to outline that when these funds are kept for extended periods at these multilateral agencies such as the IDB then there is a cost attached that usually racks up.
“We have paid implementation fees to the some of the international agencies that are managing these funds to us – sometimes as much as, [of] the total expenditure, nearly 20 per cent of the money has gone to implementation fees or management fees already,” he stated.
Jagdeo made these remarks on Friday during the signing of the historic US$750 million multi-year deal for the sale of Guyana’s “high-quality” carbon credits to United States oil major, Hess Corp.
He pointed out that while the Norway deal was good for Guyana at the time, there were some lessons learnt from that model and so Government knows now what to avoid. In fact, the Vice President disclosed that accessing funds has been much easier with the sale of carbon credits to Hess Corp over the next 10 years, and was done without compromising transparency.
According to Jagdeo, these revenues will be placed into an account here that will be audited annually and have parliamentary scrutiny.
“So, all the funds will be in one account, and we have set up that account which will be reported to Parliament and there will be an international audit of the account. So, it’s under our control now compared to the past where you had to go through a multilateral agency.”
“It’s money that we [will] earn as a country. Just like exporting sugar or rice or bauxite or gold, we’ve exported forest carbon and so now we’ve earned the money. So, the money will now come into the treasury as revenue but will be in a separate account though so that the Auditor General, everyone can know what’s going on and then Parliament can be notified about it,” the VP stated.
Guyana boasts unrivalled forest conservation credentials. In fact, the country’s forest is over 18 million hectares and stores over 21 gigatons of carbon. Guyana has also successfully maintained 85 per cent of its forest cover, with a deforestation rate that is 90 per cent lower than other tropical countries. Its forests also store about 18 per cent of the world’s carbon.
It was for this reason that Guyana and Norway’s results-based deal was entered into by the Jagdeo-led regime under his brainchild initiative, the Low Carbon Development Strategy (LCDS) – the first of its kind from a developing country. Under the current Irfaan Ali-led regime, this strategy has been revised and relaunched as the LCDS 2030, which includes diversifying Guyana’s energy grid with other forms of clean and renewable energy – namely natural gas, hydropower, wind power and even biomass. It is anticipated that by 2030, 70 per cent of Guyana’s energy mix will be supplied through green energy.
Chief of among these is another PPP/C brainchild – the Gas-to-Shore project which includes a 300-megawatt Power Plant and a Natural Gas Liquids (NGL) Plant, using natural gas from offshore that will be pipelined to Wales, West Bank Demerara where the facility will be constructed.
Already, Cabinet has approved the selection of the CH4 Guyana Inc/Lindsayca Inc consortium to construct the two plants and that contract is expected to be signed before the end of this month. Moreover, the Environmental Protection Agency (EPA) only recently also granted approval for the project’s Environmental Impact Assessment.
