Guyana targeted to benefit from new EU project financing model

Last Updated on Thursday, 13 July 2023, 16:45 by Denis Chabrol

The European Union (EU) is providing a new model of infrastructure pr0ject financing to Guyana and other Caribbean and Latin American countries that will see the bloc continuing to provide grants with the expectation that international and regional financial institutions will inject massive amounts of cash for larger projects, EU Ambassador to Guyana René van Nes said Thursday.

“This is an approach where we say we can use our resources to leverage much larger investment projects,” he told reporters  Called the Global Gateway, he said that approach could include the European Investment Bank (EIB), Inter-American Development Bank or the Caribbean Development Bank along with the private sector, a “very crucial partner.”

He explained that the new approach would entail the EU funding feasibility studies on larger versions of identified projects to encourage  international investment banks and the private sector to inject their cash.

Asked what would happen if those international and regional financial institutions do not provide counterpart financing through the two-year-old Global Gateway initiative, the EU envoy sought to assure that the two funding models would run together for the time being. “We will first try and we have not put all our eggs in this basket. It is not that we are going just going all in and al chips on that and now it’s ony the Global Gateway.

It is a new track slowly developing that alongside, next to our traditional way of working so we will do both and if we’re successful, then we will probably expand that and we may be more successful in some countries than in other countries,” he said. The EU Ambassador said the success of the new system in Guyana would be evaluated.

Global Gateway focusses on the five investment opportunities of transport, digital, health, climate and energy, and education and research. He said there are “very concrete investment programmes” in each country that would fit into one of those areas.

Mr van Nes said Guyana has already started to benefit from funding through Global Gateway by helping to preserve the forests by creating alternative livelihoods or value-added wood products for about 40,000 persons rather than the exportation of raw logs. Under the Guyana-European Union (EU) Forest Law Enforcement, Governance and Trade (FLEGT) Voluntary Partnership Agreement (VPA), Guyana’s timber exports to Europe is screened for sustainability sourcing but also the working conditions. “That will put Guyana right on top of countries in the world that are among a few that have that have achieved that certification,” he said.

Also likely to be supported by Global Gateway is supporting Guyana’s transition from fossil fuel to renewable energy through the provision of “off-grid solar power” for several communities. “The government is already doing a lot and we are talking to them to see how we can support this,” he said.

Through a loan from the European Investment Bank, the Caribbean Development Bank is funding the construction or upgrade of seven water treatment facilities in Guyana.