Amid financial and generating turmoil at the Guyana Power and Light (GPL), the Inter-American Development Bank (IDB) yesterday announced the approval of a US$12M ($2.4B) loan for the power sector which aims at sustainable reduction of electricity losses among other things.
The Ministry of Finance will carry out the project, which will be funded by the IDB’s Fund for Special Operations and the Ordinary Capital, the Bank said in a press release yesterday.
The loan will be disbursed over a period of four years in three tranches. The statement did not say when the first tranche would be released.
It said that the loan will support the effort of the government to promote a more sustainable and efficient power sector in Guyana.
This loan is the latest of a series of interventions that the IDB has made in the power sector over the last two decades.
Apart from aiming to reduce electricity losses, the loan will support activities in the power sector to improve efficiency by supporting institutional, legal and regulatory reforms, planning and priority setting in the sector that will contribute to sustainable power loss reductions and to strengthen the power company’s capabilities in corporate governance, transparency and accountability.
The release said that there are many challenges that hindered the advancement in power sector infrastructure in Guyana and quoted IDB team leader Alejandro Melandri as saying “a unified approach from the utility company, the Ministry of Finance and the Office of the Prime Minister will improve the current power sector environment with the long-term goal of increasing the overall competitiveness in the country for Guyana”.
It was unclear if the loan was an emergency intervention or had been in the pipeline for sometime but it comes amid growing concerns over the financial position of GPL and the level of technical and commercial losses there. (See other story on this page.)
