to set up $1B oil service financing facility in Guyana

PROFESSOR Benedict Oramah, President and Chairman of the Board of Directors of the African Export-Import Bank (Afreximbank), addressed the Guyana Energy Conference and Supply Chain Expo (February 18-21), stressing the crucial role of enhanced co-operation between the African and Caribbean regions in the oil and gas industry.

He announced a $1 billion oil service financing facility to support Guyana’s local content development while fostering collaboration with African oil service companies.

In his address, Professor Oramah highlighted the readiness of skilled oil service companies from Ghana, Egypt, and South Africa to work alongside Guyanese enterprises. “These companies are ready and willing to support Guyanese… And of course, Afreximbank is there to underwrite the marriage,” he stated, reinforcing the Bank’s commitment to enabling strategic partnerships that benefit both regions.

The financing facility will be deployed either directly to qualifying corporate clients or through a factoring line via local banks. This mechanism aims to ensure Guyanese contractors have the financial backing needed to thrive in the burgeoning oil service industry.

Professor Oramah also stressed the significance of retaining oil sector revenues within Guyana. He noted that the oil service sector could be worth between $5 to $8 billion annually but warned that much of it would be lost to foreign companies if local businesses were not adequately positioned.

“Retaining even 50 per cent of these revenues within Guyana would increase the country’s GDP by 29 per cent to 47 per cent,” he explained, emphasising the need for strong local content policies that empower Guyanese entrepreneurs.

Beyond oil, Professor Oramah urged Guyana to mitigate the risks associated with an over-reliance on crude revenues. He recommended securing long-term off-take contracts with oil service companies to ensure stable market access and price security. He also cautioned against the dangers of the ‘Dutch Disease,’ drawing from Afreximbank’s three decades of experience financing oil and gas activities across Africa.

“These measures are necessary if Guyana and other new entrants in the Caribbean and Africa are to avoid the painful Dutch Disease. We have witnessed oil-dependent economies transform for better or worse through the years. The difference lies in the policy choices made by leaders,” he observed.

Afreximbank’s announcement signals a new era of collaboration between Africa and the Caribbean, ensuring that Guyana’s oil boom translates into sustainable economic growth and local empowerment through strategic partnerships and financial support.