GEORGETOWN, Guyana, CMC – The United Kingdom’s credit agency, UK Export Finance (UKEF), is making available an estimated GBP£2.1 billion (One GBP=US$1.26 cents) to the private sector in Guyana.
However, the available funds cannot be used in the oil and gas sector.
“We are part of the UK government, and the UK government has a public policy around oil and gas and fossil fuels, so we have to follow that alignment in terms of the support we provide around the world, unfortunately, and very sadly, in the case of Guyana we are unable to provide any support for oil and gas,” said, UKEF’s Regional Head, Camilo Neira.
He said while several UK companies are involved in oil and gas, UKEF follows the” public policy of the UK government in terms of fossil fuels, and we cannot do any oil and gas related business, unfortunately.”
The United Kingdom’s Minister for the Americas, David Rutley, said Tuesday that the increase in available funds through UKEF effectively increases the ability of businesses to access finance for projects and programs and enhances the level of potential new business.
“It’s also reflective of the confidence that the UK has in the stewardship of the economy of Guyana by the government,” he added.
Chairman of the Private Sector Commission (PSC), Komal Singh, said UKEF’s increase in its country limit of the Guyana Market Risk Appetite (MRA) from GB£750 million to GB£2.1 billion would allow for funding to be made available to medium and large scale companies from a borrowing limit of approximately US$20 million from commercial banks in Guyana.
“This access to funds they have here now will assist these companies in going to them. The good news with this fund is that you can borrow up to a minimum of one million pounds,” he said.
Singh said borrowers would only have to satisfy a mere 20% UK local content.
“It allows you the flexibility to develop even the resources aren’t available in the UK. You can now go outside the UK and benefit from that fund,” he said, adding that the PSC members were told that the interest rate is “competitive” and that they would have to await further details at a workshop soon.
Neira said that the interest rate would depend on the transaction, sector, borrowing company, and the lender bank that would be provided with a UK Treasury Guarantee.
“At the end of the day, what we do is that the bank is more able to lower their interest rates and extend the terms of the loan just based on the fact that there is collateral in place; it’s a UK Treasury Guarantee,” he said.
Rutley said that at the government-to-government level, UKEF could support Guyana in accessing competitive long-term financing for national priority projects such as social infrastructure, health care, education, and transport.
Finance Minister Dr. Ashni Singh said, “We certainly intend, at the sovereign level, to explore and pursue every available opportunity to use this facility.”
He also encouraged the ” proliferating private sector” to take advantage of the financing to do business with British companies.
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