Senior Minister in the Office of the President with Responsibility for Finance and the Public Service Ashni Singh has presented two amendatory loan agreements to Parliament, a Ministry of Finance release stated.
The first Amendment Agreement is dated May 24, 2024 and amends the Export Finance Facility Agreement dated June 14, 2022, between the Co-operative Republic of Guyana, represented by the Ministry of Finance as the Borrower, and UK Export Finance as the Lender, and the UniCredit Bank Austria AG as the Agent and Arranger, for an amount of €161,016,949.15 for the Guyana Paediatric and Maternal Hospital Project. This Amendment Agreement is to facilitate the inclusion of a Climate Resilient Debt Clause into the original agreement, the release added.
As the debt landscape evolves, both creditors and borrowers are pursuing innovative ways to mitigate debt burden crises associated with climate incidents, natural disasters, pandemics, or epidemics, it explained.
According to the release, Guyana is one of the first countries to adopt the Climate Resilience Debt Clauses (CRDCs) directly as part of its loan agreement with the UK Export Finance. The adoption of CRDCs will support Guyana’s economic resilience by allowing the deferral of debt payments in the wake of climate crises.
This means that should Guyana experience a severe environmental shock or health crisis, it will have more to spend on what will be most important: protecting its citizens’ lives and livelihoods as the deferral of repayments will provide for low income and developing countries that become severely affected by natural disasters to repurpose financial resources set aside for deferred payments to repair physical infrastructure damage. On the other hand, in the event of an epidemic caused by an environmental catastrophe, the deferred payment can be utilised for much-needed medical supplies and equipment.
The second Amendment Agreement presented to Parliament by the Senior Minister was dated July 4, 2024, and amends the Term Loan Facility Agreement dated December 22, 2023, for an amount of CA$120 million, between the Cooperative Republic of Guyana and Canada, for spending relating to combatting human trafficking, gender-based violence and women economic empowerment.
This Amendment Agreement incorporates changes to the “Repayment Schedule” which is necessary to facilitate the drawdown of the second tranche of CA$39 million under the Term Loan Facility Agreement, the release added.
