Guyana pushes onward with diversified energy
Share on facebook
Share on twitter
Share on google
Share on whatsapp

THE diversification of energy sources is a key component of economic growth for developing countries. Cheap and reliable electricity, in particular, drives local and foreign direct investment and also lowers the cost of living for residents.

The Inter-American Development Bank (IDB) shares a similar view, stating that electricity is critical in developing countries to help pull residents out of poverty. While many developing countries, particularly in Latin America and the Caribbean, still rely heavily on imported heavy fuel oil and biomass for energy, many governments are pushing for more environmentally friendly and sustainable options. Gas as well as renewable sources, including hydro, solar, wind, and geothermal, are already gaining momentum in the region and Guyana is no different.

The current government has committed to reducing the cost of electricity by half before the next elections. During a recent press conference, Vice President Bharrat Jagdeo reiterated that this would help Guyana “build conditions for a progressive prosperous non-oil economy so that when the oil disappears, we still have a booming economy with jobs for all our people.” Making cheaper electricity a priority now should give Guyanese and international investors the opportunity to explore new businesses that can diversify the economy.

Guyana is on its way to diversifying its energy mix to produce more affordable and reliable electricity. Progress on the gas to energy project as well as the recent government announcement to move forward with the Amaila Falls hydropower project are promising new developments. These two projects should increase supply and provide more efficient, reliable, and cleaner power, which will likely benefit sectors that rely heavily on electricity.

Guyana relies on heavy fuel oil to produce electricity, which is expensive, inefficient, and less climate friendly. According to the International Monetary Fund (IMF), switching to gas and reducing electricity rates could lower basic living costs for Guyanese by over 5 percent per month on average. With diversification into gas and hydro, as well as other projects that will further expand energy sources, Guyana is creating the enabling environment to attract even more private capital across its portfolio of burgeoning economic sectors.

These projects will likely pave the way for new industries that further support job growth and prosperity. As the gas-to-energy project comes online this will present even more opportunities for Guyanese, including new jobs that pay higher wages and more opportunities in other spin off industries like domestic production of propane and heating fuel. Additionally, from this cheaper and more reliable source, Guyana can consider energy intensive industries like chemicals and construction materials manufacturing.

While these new opportunities are all positive, none of this would be possible without Guyana’s rapidly growing oil and gas sector. Oil revenues could allow the government to invest in multi-million-dollar energy projects that can likely change the county’s future forever and drive massive socio-economic development.

The Natural Resources Fund (NRF) currently holds about US$450 million that can be used to support infrastructure development and social programmes. By capitalizing on its oil and gas resources now, Guyana can also utilise its windfall to fund low carbon ambitions, developing green industries and jobs while protecting itself from the harsh realities of climate change.

SHARE THIS ARTICLE :
Share on facebook
Facebook
Share on twitter
Twitter
Share on google
Google+
Share on whatsapp
WhatsApp
Share on facebook
Share on twitter
Share on google
Share on whatsapp
Scroll to Top
All our printed editions are available online
emblem3
Subscribe to the Guyana Chronicle.
Sign up to receive news and updates.
We respect your privacy.