UK increases lending window to Guyana govt, private sector

Last Updated on Tuesday, 27 February 2024, 16:47 by Denis Chabrol

Businesses in Guyana would now be able to access a maximum of GB£2.1 billion through UK Export Finance (UKEF), the United Kingdom’s credit agency, than those available from local commercial banks but none of the money can be used in the oil sector, the UK’s Minister for the Americas, David Rutley announced on Tuesday.

Chairman of Guyana’s Private Sector Commission (PSC), Komal Singh said UKIF’s increase in its country limit of the Guyana Market Risk Appetite (MRA) from GB£750 million to GB£2.1 billion would free up the local medium and large scale companies from a borrowing limit of approximately US$20 million from commercial banks in Guyana. “This access to funds that they have here now will assist these companies now to go them. The good news with this fund is that you can borrow up to a minimum of GB£1 million,” he said.

He also said borrowers would only have to satisfy a mere 20 percent UK local content. “It allows you the flexibility to develop even the resources aren’t available in the UK, you can now go outside the of UK and benefit from that fund,” he said. Mr Singh said he and his business sector colleagues were told that the interest rate is “competitive” and that they would have to await further details at a workshop t be held in the coming weeks.

UKEF’s Regional Head, Camilo Neira told Demerara Waves Online News that the interest rate would depend on the transaction, sector, borrowing company and the lender bank that would be provided with a UK Treasury Guarantee. “At the end of the day, what we do is that the bank more able to lower their interest rates and extend the terms of the loan just based on the fact that there is collateral in place; it’s a UK Treasury Guarantee,” he said.

Mr Rutley said the hike in available funds through UKEF effectively increases the ability of businesses to access finance for projects and programmes and enhances the level of potential new business. “It’s also reflective of the confidence that the UK has in the stewardship of the economy of Guyana by the government,” he added.

At the government-to-government level, he also explained that  UKEF  could support Guyana in accessing competitive long-term financing for national priority projects such as social infrastructure, health care, education and transport. Finance Minister Dr Ashni Singh said, “we certainly intend, at the sovereign level, to explore and pursue every available opportunity to make use of this facility,” he said.

Dr Singh also encouraged Guyana’s private sector, “which is growing so rapidly” , to take advantage of the financing to do business with British companies. Representatives of the PSC, Britain-Guyana Chamber of Commerce, Guyana Manufacturing and Services Association and the Georgetown Chamber of Commerce and Industry met with the UK Minister of the Americas before he announced the increase in the loan facility.

UK officials said none of the money could be used in the oil and gas sector as that would be against the British government’s policy position on fossil fuels. “We are part of the UK government and the UK government has a public policy around oil and gas and fossil fuels so we have to follow that alignment in terms of the  support we provide around the world so unfortunately and very sadly, in the case of Guyana we are unable to provide any support for oil and gas,” Mr Neira said.

Though several UK companies are involved in oil and gas, Mr Neira said UKEF follows the ” public policy of the UK government in terms of fossil fuels and we cannot do any oil and gas related business unfortunately.