The Government of Guyana in collaboration with Demerara Bank Limited (DBL) yesterday officially launched the $900 million revolving fund for the forestry sector, aimed at boosting small- and medium-scale logging operations in a sustainable environment.
The Government of Guyana is contributing $300 million, while DBL will provide the remaining $600 million.
“It is significant that we chose the International Day of Forests 2023 to launch publicly this forestry revolving fund, which was an initiative of President Ali, where he recognized not only the importance of [a] sustainable forest-based industry but also some of the constraints faced by those operating in the sector,” Finance Minister Dr Ashni Singh remarked.
President Irfaan Ali last year announced the $900 million revolving fund in a bid to increase production in the forestry sector and address challenges faced by loggers. He had made the announcement while delivering remarks at a Guyana Forestry Commission (GFC) stakeholders’ engagement at the GFC’s Kingston office.
During the launch, yesterday Singh highlighted the fund’s significance and that it presents many opportunities for loggers. He pointed out that through the financial support, borrowers have the opportunity to graduate from their current scale of operations and utilise the financing mechanism as a business incubator.
However, while he touched on the opportunities now afforded to loggers, Singh cautioned that the loans are not to be considered as grants. He appealed to borrowers to honour their payment schedule to allow the funds to keep revolving.
“The borrowers have a responsibility. We want this fund to perform well. We want everybody who borrows from it to do well and for their business to grow. We expect them to repay the monies they borrow.”
Singh noted that the loans are being provided at a competitive four per cent interest rate, which should not be burdensome to borrowers. He also assured that the fund should be around for years and not just for a single generation.
“This initiative represents an important example of partnering with the private sector – in this case with a leading and pioneering commercial bank in Guyana,” Singh said in his address.
He added, “We see the forestry sector continuing to play an important role within the context of the sustainable management of Guyana’s forest resources for the long term in the interest of Guyana continuing to make our contribution to the global fight against climate change.”
Meanwhile, Demerara Bank’s Chief Executive Officer, Pravinchandra Dave, while speaking to the audience underscored that his bank is committed to supporting developmental projects throughout the country.
Speaking on the fund, the bank’s CEO stated that they have waived several fees and implemented a special line for communication between GFC and the bank to expedite applications.
He stated that his bank holds firm to the view that the benefits offered by the bank should go to all sectors of the society.
Three sectors
“Sixteen per cent of our lending goes to agriculture, 10 per cent to oil and gas, 11 per cent to telecommunication, and we found that three sectors are neglected – forestry, agriculture, and mining.
“We are working out a project in which we can help these three sectors,” Dave disclosed while pointing out that the bank supports climate change efforts through specialised loan agreements.
In the same breath, he indicated that they stand ready to assist in future projects that will support the development of the country.
Minister of Natural Resources, Vickram Bharrat, under whose portfolio the forestry sector falls, yesterday said it is government’s objective to move the sector from being the traditional exporter of raw materials to becoming a value-added one. He pointed out that the fund can support this objective as more small- and medium-scale stakeholders can go into processing and developing wood products.
“In value-added we will achieve all our targets. Keeping the forest intact, reducing deforestation rates even further, ensuring we keep the industry sustainable, and provide more jobs in the sector,” Bharrat declared as he announced the direction in which he would like to see the GFC progress.
The minister also explained that through an advanced value added sector, there are many opportunities and markets that can be tapped into.
The President had said that with the funds, the government and the commission will place more emphasis on the development and expansion of small- and medium-scale loggers and community loggers associations.
“We are now going to unleash $900 million for the market to step up production, so that we can meet the demand, especially for the value-added product, and to push the sector, to give this sector a real boost because we are very concerned about the production level and where it should be to meet our national demand in the markets that we’re building”, he had said.
