Dear Editor,
An article appearing in Stabroek News on Monday (05/08/2024) reported that Ashni Singh, Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, tabled in Parliament “an amendment of the Export Finance Facility Agreement dated June 14, 2022, between the Co-operative Republic of Guyana, 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.” According to the release, “This Amendment Agreement is to facilitate the inclusion of a Climate Resilient Debt Clause into the original agreement.” The stated purpose of the amendment is “to mitigate debt burden crises associated with climate incidents, natural disasters, pandemics, or epidemics.”
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, and its adoption will support Guyana’s economic resilience by allowing the deferral of debt payments in the wake of climate crises. It is expected “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.”
While this initiative is commendable , it is just a start if we are to seriously and effectively deal with the exposure of the health sector infrastructure (or any of our vulnerable socio-economic sectors for that matter) to climate and other risks. It should be accompanied by efforts to identify beforehand what those risks are likely to be and to use that knowledge to make final decisions on the location, final design and construction of the proposed facility.
This is the main purpose of carrying out Environmental and Social Impact Assessments that include climate risk assessments in instances such as these. The information on the future climate in Guyana is available for use in these assessments and provides guidance on e.g. future wind and rainfall regimes so that adjustments can be made to decisions about design, location and steps that have to be taken to mitigate those risks and to ensure the uninterrupted functioning of the facility even after exposure to an extreme climate event (floods, drought, unusual wind patterns).
Guyana is now participating in a regional PAHO Smart Hospitals pilot project which aims to make health facilities resilient to existent and future climate risks. Apart from the structural changes necessary (e.g. to deal with floods, heat waves, unusual wind regimes), consideration is also given to the continued functionality of the facility by ensuring the availability of an adequate supply of water and power. The two latter requirements are attained through providing adequate water harvesting and storage and renewable energy systems (solar) for the facility. The Smart Hospitals project embodies a principle developed by the Caribbean Community Climate Change Centre over a decade ago, that in our building and construction industry in the region, it is of paramount importance to ensure that key national institutions remain functional before, during and after an extreme event.
One would hope that this approach is being espoused in the implementation of the Guyana Paediatric and Maternal Hospital Project. No information has been provided on the status of implementation for this project but one would imagine that if construction has commenced, tenders would have been advertised, a contractor selected, a requirement for an Environmental and Social Impact Assessment to be conducted (unless waived by the EPA), inclusive of a climate risk assessment and mitigative actions arising from the latter and included in the final design of the contractor. The question arises on this public interest matter as to whether due diligence been employed to ensure that the final approved design is climate resilient and our investment results in a sustainable facility that can survive the challenges of our changing climate.
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 and this will support Guyana’s economic resilience by allowing the deferral of debt payments in the wake of climate crises.” Including climate risk assessment in the final design of the project enhances the climate resilience of the latter, contributes to its long term sustainability and further bolsters the country’s economic resilience. From the donor side of the fence, they can contribute to the increased integrity of the proposed investment by requiring the client country to include climate risk assessments in their final proposal. Financial organisations now ask for their clients to conduct climate vulnerability assessments on their proposals and to ensure that, if necessary, they make the appropriate adjustments in their final design, to mitigate the projected climate risks that are identified. Indeed this is now a requirement of our own regional facility the Caribbean Development Bank.
As Guyana pursues the implementation of its Low Carbon Development Strategy, it is important that sustainability is factored into the climate resilience aspect of the programme. This can be accomplished by ensuring that climate impact assessments are applied to all development plans and that projects to be implemented are suitably adjusted, so that they can withstand the impacts of extreme weather events (floods, sea level rise). In that way, we can be assured that our built environment will not experience the level of devastation that we have just witnessed in the region, as a result of an extreme weather event, in this case, hurricane Beryl. It will also make us less dependent on mechanisms such as “Climate Resilience Debt Clauses” in the future, as we would have taken the proactive step of factoring climate risk into our development landscape.
Sincerely,
Neville Trotz
