The Government of Guyana, through the Minister of Foreign Affairs and International Cooperation, yesterday signed a US$2 billion memorandum of understanding (MoU) with the United States Export-Import (EXIM) Bank to facilitate greater investment in the country.
President Irfaan Ali is currently leading a delegation to the United States where the MoU was signed between Minister Hugh Todd and President of the Bank, Reta Jo Lewis in Washington D.C.
The government, in a statement, said that the MoU represents an important milestone in US-Guyana relations since it lays the foundation for Guyana to access EXIM financing and facilities for the first time and provides for interventions at a scale that is likely to have a lasting developmental impact. Under the agreement, the parties agreed to explore options for utilising EXIM’s standard instruments, which include direct loans and medium- and long-term guarantees, to finance US exports to Guyana for Government projects.
The statement said that the MoU also identifies a number of indicative sectors in which projects may be carried out. These include but are not limited to infrastructure including roads and bridges, energy, telecommunications, water treatment and sanitation and agriculture.
Speaking directly after the signing, Ali said that partnerships are crucial for the development of any country and Guyana welcomes this partnership. He added that Guyana sees the US as a partner based on shared principles and values. He pointed to the fact that the US is home to the largest Guyanese diaspora noting that this makes both countries culturally connected.
“In this development phase of our country, we want to see greater US participation not only from the government but from the private sector. One of the inhibiting factors has always been the ease of access to financing and the barriers to financing. This today [this signing] is the single most important signal not only for Guyana but for the region [that] the United States through one of its agencies is serious about the commitment and promise to this region, the CARICOM region,” Ali said.
He related that the signing of the MoU is an open invitation for the private sector of both countries to now move aggressively forward on a platform that is supported by both the Government of Guyana and EXIM Bank. He also expressed hope that the private sector would “make full use of this opportunity.”
“The level of seriousness that is attached to this relationship has now been cemented in a MoU that not only outlines areas but set an initial figure of $2 billion to be allocated to the development and projects in Guyana. This is [a] dynamic, futuristic, strong bold move on behalf of EXIM Bank in advancing this relationship.
Environmental services
“The areas we have identified show a broad multifaceted nature of the leadership of EXIM Bank. Anyone looking at Guyana [to invest] now narrowly focuses on oil and gas at their own detriment because there are significant other distinct advantages. [We are on the path to] becoming the leader in climate change, environmental services, biodiversity services, food security, food production and agriculture, and critical infrastructure … that can unlock tremendous potential for the vast array of natural resources we have. Unlocking the connection of North Brazil to the Atlantic Ocean, that will develop a logistics and transport hub second to none in scale, this is what we are talking about. This is not a simple MoU but a MoU that has the potential to unlock all of this,” Ali exulted.
The President added that EXIM Bank’s focus on renewable energy will allow Guyana to advance its environmental commitments and show the country’s commitment to cleaner energy and advancing sustainable development. He spoke about the overhauling of the healthcare infrastructure, which is a partnership with the Mount Sinai Corporation from New York.
“Infrastructure is key to the transformation. Here is the EXIM Bank providing leadership for the US private sector and unlocking the vehicle for them to have greater participation. These projects are not going to be very, very large-scale projects, they are those medium-sized projects that require medium-sized actors in the US system to get interested and knowing that there is support from the government agency will boost that interest and advance that interest.
“ICT services and technology are the keys to the upliftment and transformation of Guyana and the region. All of those issues are addressed in a holistic and comprehensive way and the doors are now opened for us to move forward with this. I commit to you that we will now aggressively, proactively and dynamically pursue this MoU to full realization of the potential benefits it brings,” Ali said.
Ali invited the Bank’s President to lead a high-level delegation to Guyana where they can engage with the local private sector and solidify the MoU.
Export credit
According to its website, EXIM Bank of the US is the official export credit agency of the United States. EXIM is an independent Executive Branch agency with a mission of supporting American jobs by facilitating the export of US goods and services. When private sector lenders are unable or unwilling to provide financing, EXIM fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales. In doing so, the agency levels the playing field for U.S. goods and services going up against foreign competition in overseas markets.
EXIM offers flexible options for project and structured financing for foreign buyers. EXIM’s financing covers a broad cross section of industries, including thermal and renewable energy, mining, technology, satellites, telecommunications, transportation and infrastructure.
EXIM primarily guarantees loans made by commercial lenders to support these exports, but also provides direct loans when needed. Repayment terms are usually between 10 and 18 years (not including construction), depending on the project characteristics.
Back in April, Senior Minister in the Office of the President with responsibility for Finance Dr Ashni Singh met with Lewis and other senior officials of the EXIM Bank where a wide range of issues was discussed. There he discussed the US’s Build Back Better World (B3W) initiative and the growing need for private sector solutions to meet the central challenges of the 21st century in Guyana.
