THE Government of Guyana and the European Union (EU) signed two financing agreements yesterday, valued at a total of approximately G$7.1 billion (27.4 million euros).
The funding is for a micro-hydropower system on the Chiung River, at Kato, in Region Eight (Potaro/Siparuni) and the sugar industry. Minister of Finance, Dr. Ashni Singh and Head of the EU Delegation in Guyana, Ambassador Robert Kopecky affixed their signatures to the documents in the Boardroom of the Finance Ministry, on Main Street, Georgetown.
In the promotion of sustainable and climate friendly energy use, the EU had, recently, approved of the micro-hydropower development at a cost pegged at 2,455,797 euros (about G$615M), with the EU contributing 1,841,848 euros (nearly G$460M), under the 10th European Development Fund (EDF) while the Guyana Government will contribute 613,949 euros (equivalent to G$154M).
For sugar, some G$6.5 billion (equal to 24.9 million euros) will be provided in 2012 in the framework of the accompanying measures to the changes in the EU trade regime with Sugar Protocol countries.
Minister Singh said: “I regard today’s occasion as an extremely important and significant one, not only because it represents a significant milestone in the relationship between the EU and Guyana, that is to say the manifesting of the signing of these two agreements, but also given the fact that the two agreements that we are signing are in two areas that are so central to our national policy agenda.”
Alluding to the developing of the micro-hydropower network, he viewed it within the context of the national strategy as it relates to the emphasis on low carbon development and also the provision of social services.
Every home
“We have said that we would like to bring electricity to every home in Guyana. We recognise that, given the geography of our country, it would be difficult to have a single national grid that will see the delivery of electricity to every home,” he acknowledged and said government has been seeking solutions, including renewable energy and he mentioned distribution of solar systems to homes in the hinterland.
“So I want to situate this project within the context of the Low Carbon Development Strategy, within the context of our commitment to bring electricity even to our hinterland communities, and within the context of our commitment to improve social services,” the Minister explained.
Singh said Government will be constructing a secondary school complex in Kato, which will be powered by this hydropower plant and will accommodate between 550 and 750 students.
Touching on the importance of the sugar industry to Guyana and signing the agreement for the Guyana Annual Action Programme 2011 on Accompanying Measures on Sugar, he recognised the historic relationship between Guyana and EU as it relates to the product and mentioned the matter of the adjustment in prices.
Singh said: “We have long recognised the need to implement reforms in the sugar sector to achieve a competitive and viable sugar industry and we have developed an action plan that involves a number of elements aimed at achieving a viable, competitive and profitable sugar industry in the long term.”
Towards that objective, he said significant investments have been made in the industry and, over the last ten years, including the G$4 billion in the 2012 National Budget, Government would have invested in excess of US$200M, including the Enmore Packaging Plant and a lot of this has been supported by the European partners.

Absolutely critical
“Investments such as this are absolutely critical to ensuring that our sugar industry is going to be profitable into the long term,” Minister Singh reiterated.
He added: “This programme which will see the 24.9 million euros delivered under the Budget support mechanism will better enable Government to continue to support the sugar industry in the future.”
The Finance Minister also expressed the appreciation of the government and people of Guyana to the EU.
Ambassador Kopecky said they know how crucial energy is for the development of the Guyanese economy and “we know how big the river potential in this country is.”
He said the micro-hydropower plant, which the Guyana Government will be contributing to, will help to boost development in secluded places like Kato and the building of a secondary school will improve human development which “is the most crucial for the development of any society.”
Referring to sugar, the envoy said the EU decided to help the governments of the countries involved to deal with the new situation of price cuts, “that they could either modernise or further develop the industry or either transfer this potential agricultural land and this potential for working labour to something else.”
Kopecky said this latest grant to Guyana is part of the EU funded Multi-Annual Sugar Programme 2011-2013, which supports the Government of Guyana in its efforts to improve the competitiveness and viability of the sugar industry and promote agricultural diversification.
In particular, according to a press release issued at the signing, it will contribute to:

* increasing sugar production and expanding market shares;
* diversifying the sugar industry and adding value to the final product;
* improving the efficiency and profitability of sugar cane and sugar production;
* reinforcing private cane farming and
* implementation of full solution Single Windows Automated Processing System (SWAPS) to facilitate agricultural exports.

Performance indicators
The assistance to the sugar industry is being provided through a direct budget support mechanism and the disbursements will be triggered by the achievement of performance indicators monitoring the implementation of the sector policy on sugar, as well as progress in the export of agricultural produce.
Funds will also be channeled towards studies, evaluations and audits to ensure effective implementation.
From 2006, when the programme started, the EU has now made available 72.5 million euros to the local sugar sector (about G$19.3 billion at the current exchange rate).
As part of the Government’s broader hinterland electrification programme, the addition will comprise a 330 kilowatts micro-hydropower station with its primary energy source being the 36 metres head waterfall in the Chiung River, in the vicinity of Kato village.
It would provide sufficient generating capacity for electrical services to the secondary school complex to be constructed by the Ministry of Education, existing government buildings, such as the nursery/primary schools, the Guest House, the Police Outpost, medical facilities, school dormitories and also facilitate agro-processing and commercial farming.
Furthermore, it would furnish electricity to Paramakatoi, through a 16 kilometres transmission line which forms part of the intervention.