The Inter-American Development Bank (IDB) investment arm has inked a US$5 million credit facility agreement with local company 2020 FMCG (Farfan and Mendes and Canadian company, Crosbie Group Limited) Incorporated, with the end goal of advancing renewable energy in Guyana.
In a statement, IDB explained that a revolving fund for a five-year duration would be created to develop and expand the commercial and utility-scale solar photovoltaic (PV) energy being installed by the company.
“The US$5 million facility with a five-year tenor will finance the company’s working capital needs to advance the use of renewable energy in Guyana. IDB Invest’s revolving working capital facility will allow 2020 FMCG Inc to optimise its cash-conversion cycle, strengthen the relationships within its value chain and mitigate foreign-exchange risk by bridging the cash-flow gap between payments made to suppliers and payments received from clients.”
According to the institution, the financing deal is aligned with Guyana’s Low Carbon Development Strategy (LCDS) 2030, which calls for the generation and usage of clean-energy resources.
“It also strengthens IDB Investment’s commitment to working with the private sector to increase investments in renewable energy in Guyana and across Latin America and the Caribbean, driving action on climate change.”
“The project is expected to contribute to five of the United Nations’ Sustainable Development Goals, No Poverty (SDG 1), Affordable and Clean Energy (SDG 7), Decent Work and Economic Growth (SDG 8), Industry, Innovation and Infrastructure (SDG 9) and Climate Action (SDG 13),” IDB further said.
IDB Invest is a member of the IDB Group, which is a multilateral development bank that finances the economic development of its member countries in Latin America and the Caribbean through the private sector.
“IDB Invest finances sustainable companies and projects to achieve financial results and maximise economic, social, and environmental development in the Region. With a portfolio of $15.3 billion in asset management and 375 clients in 25 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries,” the financial institution said.
Meanwhile, Farfan and Mendes is established in providing equipment and services to various sectors, including agriculture, forestry, renewable energy, oil and gas, and mining.
In fact, Farfan and Mendes was the contractor responsible for the $600 million solar farm project in Bartica, on behalf of the State. Established in 1967, Farfan and Mendes subsequently formed a joint venture with the Canadian company, Crosbie Group Limited to become 2020 FMCG.
“Its partnerships with leading companies such as Crosbie Group, Soventix Caribbean and Concrete Canvas etc have enabled it to offer a wide range of products and services to clients,” IDB said.
“Through the company’s Sustainability Strategy and a proven track record of success, Farfan and Mendes is helping to realise the Low Carbon Development Strategy ambition that renewables will account for over 70 per cent of installed generation capacity by 2040 in Guyana.”
There are a number of policy decisions the Government has taken towards realising its renewable energy ambitions in keeping with Guyana’s commitment to reduce its carbon emissions by 70 per cent in 2030 through a progressively cleaner energy mix. These decisions are also interlinked with the renewed and expanded LCDS 2030.
And IDB has been involved in a major way in some of these initiatives, such as the $362.4 million IDB-funded contract that was signed last year for a solar farm at Mahdia, Region Eight, that will benefit close to 3000 residents and significantly reduce the State’s expenditure on heavy fuel oil.
The 0.65MW Mahdia solar farm is being financed through a loan from the IDB, under the Energy Matrix Diversification and Strengthening of the Department of Energy (EMISDE) programme. There is also a 1.5MW Bartica solar farm, which will cost $625 million.
