—- funds must be implemented by April 30, 2021

THE World Bank has allocated US$1M to Guyana to aid its fight against the deadly coronavirus. A letter from the bank on May 20, 2020 to Minister of Finance, Winston Jordan, indicated the amount and guidance on how the fund should be allocated.

The funding comes through the Pandemic Emergency Financing Facility (PEF) which sets aid financing for 64 International Development Association (IDA) countries. “I am writing to inform you that the PEF insurance has triggered for COVID-19, making grant funds available to 64 IDA countries to help finance response to the ongoing pandemic. The indicative allocation for Guyana is US$1 million. Annex one provides guidance on the options that Guyana has available to access its PEF allocation. PEF funds may be used to finance all eligible activities under the country’s health sector response plan for COVID-19,” World Bank Country Director for Caribbean countries, Tahseen, Sayed stated in a letter.

PEF was established in 2017 after the 2014-15 West Africa Ebola outbreak, to provide
financing for countries and qualified agencies to respond to major disease outbreaks. It includes an insurance window financed by pandemic catastrophe bonds and swaps
issued by the World Bank, with annual premiums paid by funds from Japan, Germany, and
IDA. Through this insurance window, coverage is provided for all IDA-eligible countries for select diseases listed by the World Health Organisation (WHO) as likely to cause major epidemics if the contagion spreads across national borders.

It has been noted that IDA countries are likely to face severe economic and social consequences due to the coronavirus outbreak. According to the World Bank, Guyana must indicate whether it wishes to receive the PEF funds by designating a Responding Agency to directly receive the funds for implementation of agreed activities on behalf of the country or as World Bank Recipient Executed Trust Fund – RETF (either as parallel financing to a World Bank project or as a standalone trust fund operation.)

The Finance Ministry has been provided with the necessary PEF request-for-funds application form to do so. The form contains the total PEF allocation as determined by the PEF Steering Body inclusive of all cost recovery or agency fees.

Only when the bank receives the form, will it initiate the process of transferring the funds. The exact amount to be transferred will be communicated to the Responding Agency or to the RETF. The bank emphasised: “Please note that, regardless of the option used, PEF funds must be implemented and accounted for by April 30, 2021. For an RETF, this means that the latest closing date that the TF will have is January 31, 2021. The implementation period unfortunately cannot be extended beyond this date. You may wish to take into consideration the limitation of a shorter implementation period under an RETF
when deciding your preferred option.”

As of May 23, Guyana recorded 127 cases of COVID-19 and 10 deaths. This is even as there is no national budget in the country due to the current electoral impasse being remedied by a national recount. The year 2019 marked the country’s biggest budget to date standing at $300.7B. The year 2020 was expected to have an even larger budget as the country stepped into ‘first oil’ and had plans for several major development projects.

In March 2020, Minister Jordan announced that the government, through the ministry, had requested US$5M from the World Bank under its Rapid Response Facility (REF). This is even as the ministry has already disbursed GY$120M from the consolidated fund to the Ministry of Public Health to aid Guyana’s situation. Already, the World Bank has noted that its emergency operations to fight COVID-19 have reached 100 developing countries – home to 70 per cent of the world’s population. Since March, the bank group has rapidly delivered record levels of support in order to help countries protect the poor and vulnerable, reinforce healthcare systems, maintain the private sector, and bolster economic recovery.