Low Carbon Development Strategy investments take shape

AS Guyana’s Low Carbon Development Strategy moves beyond its start-up phase, the government is leading efforts to advance work on the six priority investments for this year. The six investments will accelerate Guyana’s transition to a low carbon economy by deploying the US$70M earned by Guyana for the provision of Forestry Climate Services under the Guyana/Norway Agreement.

The six 2011 investments are:

Amerindian Land Titling (US$3.9M)
The objective of this investment is to facilitate and accelerate the process of titling of Amerindian land, upon request of the village. It involves the demarcation and granting of communal land tenure rights to Amerindian communities, a process that is already underway. It will include the issuance of Grants, surveying of boundaries, and subsequent issuance of Title to communities and village extensions. In 2011, the Ministry of Amerindian Affairs aims to title 13 untitled Amerindian communities that have submitted requests, as well as to demarcate 12 titled villages and to address 10 requests for village extensions. Further titling and demarcation will take place in the following years, with the aim of addressing all requests for titling, demarcation and extension by 2014.

Hinterland Electrification Project (US$4.25M)
This investment will involve installing solar home systems in every Amerindian household that has not yet received one through a previous initiative - approximately 10,500 households. The tendering process has begun, and it is anticipated that bids for the provision of the solar systems will be open shortly after the deadline of May 31st.

Amerindian Development Fund for Village Economy Development (US$4M)
The Amerindian Development Fund (ADF) will be established to support the socio-economic development of Amerindian communities and villages, through the implementation of their Community Development Plans (CDPs). A CDP, which is developed and agreed upon by the community, outlines the projects that the village identifies as priorities in order to meet its social and economic development objectives. Most CDPs aim to address challenges such as enhancing food security, creating employment, promoting equality, and building skills and capacity. Emphasis is placed on low carbon development, preservation of cultural heritage and sustainable use of natural resources.

Small and Micro Enterprise Development (US$3M)
This project will seek to address two of the major bottlenecks that constrain the development of small and micro enterprises (SMEs) and the ability of vulnerable groups to build alternative livelihoods in Guyana, which are :(1) limited access to finance; and (II) limited technical and business skills. Access to finance will be addressed through a grants programme and a mutual guarantee fund that enables SMEs to obtain a loan at an affordable rate. Lack of skills will be addressed through a training voucher scheme which will enable SMEs to obtain the training they require at existing institutions.

Amaila Falls Hydroelectricity Project  (US$45M)
Amaila Falls hydro-electricity plant is the top infrastructure priority of the Government of Guyana (GoG) and will provide a majority of Guyana’s electric power needs cleanly, efficiently, and economically starting in 2014. It will involve constructing a hydropower plant with 165MW peak capacity, as well as a 270km high voltage transmission line. The project site is located 250km southwest of Georgetown, at the confluence of the Amaila and Kuribrong Rivers. The project will be executed by project sponsor Sithe Global, which has formed a special purpose company in Guyana called Amaila Falls Hydro Inc. Principle financing will come from the Inter-American Development Bank and the China Development Bank. GRIF funds will be used to buy equity in Amaila Falls Hydro Inc., thereby reducing the annual electric capacity payment that the GoG makes to the project sponsor.

Institutional Strengthening (US$7M)
This investment will involve strengthening some of the key institutions involved in the implementation of the Low Carbon Development Strategy (LCDS) in order to ensure the smooth and timely implementation of the LCDS and related processes and to ensure that Guyana is able to meet its commitments under the agreement with Norway. The Government of Guyana has identified the need to strengthen the capacity of three key institutions in the first phase: the Guyana Forestry Commission (GFC) including the development and implementation of a National Monitoring, Reporting and Verification System, the Office of Climate Change (OCC), and the Project Management Office (PMO)

Implementation of each of the six priorities is being led by the relevant Government agency, after multi-stakeholder consultations.

Release of funds is also contingent on the approval of the Guyana REDD+ Investment Fund (GRIF) Steering Committee, which consists of Guyana and Norway. The GRIF Steering Committee was established as part of the governments’ joint work to explore how a future UNFCCC REDD+ mechanism might combine nationally led investment plans with meeting globally accepted financial, social and environmental standards.

The Guyanese and Norwegian Governments have recently taken significant action to accelerate the disbursement of the funds from the GRIF after expressing their belief that the intermediation of GRIF funds is taking longer than it should. As stated in the Joint Concept Note which governs the Guyana-Norway forest partnership:

“For global efforts on REDD+ to function well, it is critical that effective financial intermediation functions are available to forest countries and the broader international community. Existing models of ODA-financing are not designed for this purpose. Since 2009, significant progress has been made in understanding the global channels inherent in the establishment of such mechanisms to channel results-based finance for REDD+. The experience gained in the setting up and implementation of the GRIF has been valuable in this context – although its establishment was challenging and took far longer than Guyana and Norway expected. In 2011, Guyana and Norway will work with the Trustee and Partner Entities of the GRIF to identify how the GRIF mechanism can function in a way that is fit for the purpose of channeling results-based international support to the implementation of Guyana’s low carbon development strategy in an effective, efficient and equitable manner.”