The 2023 national budget to be presented by the Guyana government on Monday has just been given a boost of US$150 million by Stabroek Block co-venturer, Hess Corporation.
Guyana has received its first payment for carbon credits under its agreement with Hess Corporation, according to Vice President Dr. Bharrat Jagdeo in a Facebook post.
US$75 million has been paid as part of the company’s pledge to purchase Guyana’s carbon credits. The first payment represents US$37.5 million for 2.5 million ART-TREES credits from 2016 at a price of US$15/tonne of carbon dioxide equivalents (CO2e); and US$37.5 million for 2.5 million ART-TREES credits from 2017 at a price of US$15/tonne of CO2e.
The Architecture for REDD+ Transactions (ART) had announced the issuance of the first 33.47 million TREES credits to Guyana last December. This made Guyana the first country in the world to be issued carbon credits specifically designed for the voluntary and compliance carbon markets for successfully preventing forest loss and degradation. Architecture for REDD+ Transactions (ART) is a global initiative that seeks to incentivise the reduction of emissions from deforestation and forest degradation (REDD), as well as forest restoration and protection.
Hess has committed to purchasing 12.5 million credits from Guyana, valued at least US$750 million.
Two further payments of US$37.5 million each, for the ART-TREES credits are expected in 2023 – one in January and one in July. The VP said this brings the total amount available for appropriation in Guyana’s 2023 national budget to US$150 million.
The payments have been deposited into a US dollar-denominated account held by the Bank of Guyana overseas, for onward transmission to Guyana’s Consolidated Fund, which will be credited with the Guyana dollar equivalent.
The National Assembly, including through its Committees, will have oversight of the investment of all national revenues received from forest climate markets and managed via the Consolidated Fund through the budgetary process. Government said every payment and payment source will be communicated publicly at the point of payment, and at the point of transfer into the Consolidated Fund.
Government has committed 15% of the funds for Indigenous communities, to use as their local village organs see fit. The remaining 85% are earmarked to fulfill national development imperatives in the Low Carbon Development Strategy (LCDS) 2030.
“In keeping with established budgetary process enshrined in law, the Minister of Finance shall request the National Assembly to approve withdrawals from the Consolidated Fund, which shall be included in the Annual Budget Proposal,” the government statement said.
It added that the transactions will be appropriately tagged with a unique identifier on the Integrated Financial Management Information System (IFMIS) within the Ministry of Finance to enable the execution of annual audits.