Wednesday, February 1, 2023

Non-traditional approach to financing needed in Caribbean’s biggest oil producing nation

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As development in Guyana continues to expand, industry stakeholders are encouraging the nation’s policy drivers and the private sector to tackle the country’s steep learning curve.

To address this, Angus Young – Executive Vice President – Regional Investment Banking and New Markets, NCB Capital Markets Limited – is of the opinion that Guyana must utilise non-traditional practices.

Angus Young

“What is taking place in Guyana is absolutely non-traditional. The pace at which things are developing, the steepness of the learning curve and the exponentiality of everything that is taking place require non-traditional strategies,” Young said. “For us, it is extremely important to create the structures in financing and the availability of financing to facilitate the Guyanese people to get on this train. If we approach it in the traditional sense with the incumbent industry, it’s not going to match.”

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Young made these comments during a panel discussion last week at the launch of the Guyana Basins Summit.

The Executive VP went on to state that stakeholders such as NCB Capital Markets bring new, creative and structured types of transactions to the table. This means pioneering the development of the domestic capital market in Guyana by bringing capital from the region to Guyana to scale the Guyanese people’s abilities.

With US$12 billion in assets, Young said that NCB can provide financing in a non-traditional way for Guyanese companies that want to serve the energy services industry in Guyana. He shared that the company, which has held a presence in Guyana prior to the discovery of oil in 2015, recently completed a nine-figure deal with Guyana’s largest shore base. The project, which will support petroleum developments in Guyana, is slated to kick off this fourth quarter.

NCB has also been pushing for invoice factoring in Guyana which is the acceleration of the payment of an invoice.

“It is getting paid faster than if you were to get paid directly from whoever owes you,” he had explained to OilNOW in a previous interview. “So, maybe someone owes you and they would take a couple months to pay you, but you want to access the financing faster. We would buy the invoice from you and effectively, you get paid immediately. And we would wait to get paid by whoever owes you.”

NCB is a pan-Caribbean public company, cross-listed on the Jamaica and Trinidad & Tobago stock exchanges.

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