Guyana signs onto OPEC fund

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Guyana’s Minister of Finance, Winston Jordan signs the Agreement in Vienna, Austria with OFID Director-General Suleiman J. Al-Herbish Photo courtesy of OFID

Guyana’s private sector is set to benefit from new avenues for finance and investments with the signing of an Agreement for Encouragement and Protection of Investment with the OPEC Fund for International Development (OFID).

The country’s Minister of Finance, Winston Jordan on Friday July 14, signed the Agreement in Vienna, Austria with OFID Director-General Suleiman J. Al-Herbish. It is the first such agreement with a multilateral partner and sets in train a framework for the start of private sector operations in Guyana, the Ministry of Finance said in a statement over the weekend.

OFID’s private sector facility supports the private sector in developing countries through loans to micro, small and medium–enterprises, as well as directly to specific projects. As a pre-condition to such private sector investments, OFID requires the signature of a framework agreement with the country concerned for the encouragement and protection of investment. The agreement accords OFID the same privileges as those normally granted to international development institutions.

The signing of this agreement comes at a time when a number of other initiatives are being implemented by Government to help drive private sector growth including the design of a fiscal regime and a fiscal sustainability framework to address the management of natural resources wealth, development of a local content policy and the development of a time-lined work-plan on what the private sector needs to do to prepare for oil and thereafter.

OFID is the intergovernmental development finance institution established in 1976 by the Member States of the Organization of the Petroleum Exporting Countries (OPEC) and is bounded in ‘the natural solidarity which unites OPEC countries with other developing countries in their struggle to overcome underdevelopment.’

OFID has 13 member countries: Algeria, Ecuador, Gabon, Indonesia, Iran, Iraq, Nigeria, Libya, Kuwait, Qatar, Saudi Arabia, and United Arab Emirates and Venezuela.

Resources for the Fund come from voluntary contributions made by members and its various operations.

Between 1976 to present, OFID has committed more than US$55 million to Guyana through its public sector operations. Much of this amount was provided as debt relief—some within the framework of the Enhanced Heavily Indebted Poor Countries Initiative—while more than US$29 million was earmarked for Guyana’s energy, agriculture and financial sectors.