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Guyana wins praise for plan to use oil revenues to fund establishment of green economy

According to the Inter-American Development Bank (IADB), Guyana’s government has succeeded in formulating a comprehensive plan aimed at using oil revenues to facilitate the move toward a greener economy.

In a recent loan document, the IADB stated that the plan outlined in the country’s Low Carbon Development Strategy (LCDS) 2030 provides a clear pathway for the transition to renewable energy sources. This pathway should bring the country closer to achieving its target of deriving 74% of its energy supplies from renewable sources by 2040, the bank said.

IADB also praised the Guyanese government for its efforts to conserve natural resources even as it reaped the financial rewards of developing the country’s offshore crude oil reserves. It remarked that Guyana had demonstrated its awareness of the need to make conservation a priority in 2009, when it signed an agreement with Norway to maintain the integrity of its forests.

As part of this agreement, the loan document noted, Guyana committed to contribute the sum of $250mn over a period of five years toward participation in Reducing Emissions from Deforestation and Forest Degradation, a programme under the jurisdiction of the UN Framework Convention on Climate Change (UNFCCC).

Also in 2009, IADB said, Guyana established its integrated LCDS 2030, which is designed to prevent deforestation, address climate change and identify investments in high-potential low-carbon sectors. All of these endeavours are designed to contribute to the country’s planned sustainable growth, it noted.

Overall, the bank believes that the LCDS 2030 will accelerate Guyana’s journey to achieving a greener economy. This is especially true because the government is expected to use revenues from oil sales to help fund natural and associated gas-based energy projects, along with renewable hydropower, solar energy and wind energy projects, it said.

Aside from LCDS 2030, the Guyanese government is seeking to diversify its energy mix even further by financing projects that support the development of solar photovoltaic (PV) systems in government buildings as well as small-scale solar farms, micro-solar grid systems that will provide power in isolated rural areas and mini-hydroelectric power plants (HPPs).

The government is not alone in this pursuit, however. The national power provider, Guyana Power and Light (GPL), has opened its transmission grid to independent power producers (IPPs) in an effort to diversify.