IMF says LCDS is strengthening climate resilience, energy transition

The International Monetary Fund (IMF) has said Guyana remains at the forefront of market-based forest conservation while advancing its transition to a cleaner and more cost-effective energy mix through its Low Carbon Development Strategy (LCDS) 2030.

In its concluding statement following an Article IV mission, the Fund welcomed the government’s commitment to strengthening resilience to climate-related risks and protecting biodiversity – all key elements of the national development strategy.

The IMF also highlighted the Gas-to-Energy project, saying it is expected to significantly reduce reliance on fuel-based electricity generation by 2027. As electricity demand expands, the project is expected to lower energy costs and support Guyana’s long-term competitiveness.

The mission statement highlighted initiatives to increase agricultural production and reduce dependence on imported food, which are expected to support export diversification and improve food security. The LCDS identifies climate-resilient agriculture as a priority for adaptation, linking investments in drainage, irrigation, sea defences and water management to efforts to protect food production from flooding, drought and other climate-related risks.

Notably, Guyana’s broader energy transition also includes an expansion of renewable energy, as the country is on track to install 50 megawatts of solar generation capacity by the end of the year.

Renewable energy deployment has also accelerated in hinterland communities. Lethem is now served by two hydropower plants with a combined capacity of 2.2 megawatts, along with a 1-megawatt solar system. Currently, more than 60% of the town’s electricity is powered from renewable sources, while hydropower generation has displaced the use of more than 20,000 drums of diesel.

Separately, Indigenous communities are expected to receive GY$2.5 billion in LCDS funding this year under the programme that allocates 15% of Guyana’s forest earnings to Indigenous villages. The disbursement will bring total LCDS funding provided to Indigenous and forested communities to nearly GY$17 billion, supporting a range of sustainable development initiatives. Importantly, decisions on how LCDS funds are spent are made by Village Councils, which identify, approve and implement their own development priorities. The approach is intended to ensure Indigenous communities remain directly involved in planning and executing projects that support their long-term development.

Senior Director – Climate and REDD+, Ministry of Natural Resources, Pradeepa Bholanath, says that taken together, the developments reflect a broader pattern in which macroeconomic stability, climate and disaster resilience, clean energy expansion, and community-led development financing are being pursued as interlocking components of Guyana’s long-term growth strategy.