The Inter-American Development Bank (IDB) yesterday announced a long-anticipated US$5 million grant from the Guyana REDD+ Investment Fund (GRIF) Trust Fund to finance a small business project.
According to a release from the IDB, the project will target micro and small enterprises and the Amerindian community, which include individuals and groups without access to credit as well as those lacking appropriate business and technical training who have been affected by the restructuring of sectors such as mining and forestry. During the three-year life of the programme, it is estimated that 2,200 jobs will be created or sustained in the low carbon sectors with funds from this programme.
The money comes from the forest protection funds provided by the Kingdom of Norway under a deal with the Guyana Government. The Steering Committee of GRIF approved the project on November 30, 2012 and this was announced in a press release.
The IDB said that this project will contribute to the reduction of economic activity in Carbon Emitting Sectors by facilitating the creation of employment via micro and small enterprises in low carbon emitting sectors as identified in the country’s Low Carbon Development Strategy. This will be done by creating incentives in accessing finance and business development training in order to set up and or expand a low carbon business.
According to the IDB, this project will address two of the major bottlenecks that constrain the development of micro and small enterprises (MSEs) and the ability of vulnerable groups to build alternative livelihoods in Guyana, which are i) limited access to finance and ii) limited technical and business skills. Access to finance will be addressed through a credit guarantee fund, an interest payment support facility and a grant scheme that enables MSEs to obtain a loan at an affordable rate. Lack of skills will be addressed through a training voucher scheme which will enable MSEs to obtain the training they require at existing institutions.
Some of the sectors identified for MSE support are aquaculture, fruit and vegetable farming, agro‐processing, eco‐tourism and business process outsourcing. Two other transitional sectors – sustainable mining and sustainable forestry will also be considered.
An IDB project document said that synergies to this project will also be created with the Amerindian Development Fund (ADF), also financed with GRIF resources.
Since ADF covers one project per community and individual businesses are not supported, the project will complement the ADF activity.
The project will be executed from 2013 to 2015 by the Ministry of Tourism, Industry and Commerce (MINTIC), through the Small Business Bureau (SBB), in coordination with the IDB, the Royal Norwegian Ministry of Foreign Affairs, and the International Develop-ment Association of the World Bank.
Slow disbursement of money from the GRIF saw a role being developed last year for the IDB to intermediate funds under the Guyana-Norway forests partnership. The IDB is also one of the partner entities for projects under GRIF.
