The Guyana government is hoping to access US$1.67 million from a US$20 million World Bank loan to build capacity in the oil and gas industry by June, Minister of Natural Resources, Raphael Trotman, has said.
Trotman said that the government will like to access the advance but needed to “urgently” establish a Project Implementation Unit (PIU) that would be spearheaded by the Ministry of Natural Resources and include a coordinator, financial director and have procurement capacities among other requirements.
“Once those are in place we can receive the advance, and the larger tranche [portion] will be forthcoming towards the end of the year”, Trotman said,.
He said that the World Bank loan would be used to build oil and gas capacity in three important areas. “Strengthening the regulatory framework, working with the government on the issues of bringing the gas to shore and the other one is just general capacity building,” he said, noting that the funds will also be used to build the capacity of the Guyana Revenue Authority (GRA) and other institutions that will monitor cost recovery and similar measures in the oil and gas industry.
Trotman and Minister within the Ministry of Natural Resources Simona Broomes Tuesday met with the World Bank’s Country Director for Caribbean Countries and Latin America, Tahseen Sayed, along with other technical experts to discuss the loan.
Sayed noted that the World Bank’s International Development Association (IDA) has “significantly increased more than three folds the allocation for Guyana” from mid-2018. IDA is the concessional financing window of the World Bank.
Guyana’s allocations now stand at US$85Million over a three-year period and Sayed said the US$20 million loan is part of this allocation.
The World Bank has been working with the Ministry of Finance to support micro-fiscal and financial sector reforms “which we believe are extremely important to anchor the boom of the oil discovery that is coming to Guyana” Sayed noted.
Trotman said that the World Bank will be the country’s primary financial institution in the development of the oil and gas industry and has committed an expert towards the redrafting of the Petroleum Commission Bill.
He said the legislation, which was before a National Assembly select committee, has been delayed to facilitate input from the World Bank.
“Those inputs came at the end of February. So, we discussed with them today moving forward. They have committed to providing an expert to do the redraft,” Trotman explained.
