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- OFID set to begin private sector operations in Guyana in support of sustainable development
OFID set to begin private sector operations in Guyana in support of sustainable development
Vienna, Austria, July 14, 2017. The OPEC Fund for International Development (OFID) has signed an Agreement for the Encouragement and Protection of Investment ( AEPI ) with the Cooperative Republic of Guyana. The agreement sets out a framework for commencing private sector operations in Guyana. It was signed by OFID Director-General Suleiman J. Al-Herbish and Guyana’s Minister of Finance Winston Jordan.
Al-Herbish said the agreement would enable OFID to further promote social and economic development in Guyana by financing and investing in the Republic’s private sector. “We have worked with Guyana for many years via our other financing windows, but this agreement will allow us to support the sustainable development of the Republic’s private sector, too,” he said. “OFID’s Private Sector and Trade Finance Operations is growing in relevance and scope and represents an important instrument of development. We look forward to an expanding partnership with Guyana.”
Jordan thanked the Director-General and OFID officials for the organization’s continued commitment. “We hope this is the renewed beginning of the relationship [with OFID],” he said. “It’s important that we maintain the momentum and excitement.” He added that OFID had the potential to make a tangible difference to Guyana’s future, as it had done to its past.
Under the Private Sector Facility, established in 1998, 264 operations have been approved in support of private entities in Africa, Asia, Latin America and Europe. By the end of May 2017, US$2,952 million had been committed and US$1,822 million disbursed. In 2006, a Trade Financing Facility was launched. By the end of May 2017, US$2,832 million in term loans had been committed and US$2,563 million had been disbursed. In addition, US$2 billion in risk-sharing guarantee programs had been approved.
OFID’s Private Sector Facility and Trade Financing Facility now form part of the same financing window under the leadership of Tareq Alnassar, Head, Private Sector and Trade Finance Operations. The private sector facility channels support directly to the private sector in developing countries. Loans are made to financial institutions for on-lending to micro-, small–, and medium–enterprises, as well as directly to specific projects. Equity participation in private enterprises is also undertaken, either directly or through country or regional investment funds.
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 ( AEPI ). The agreement accords OFID the same privileges as those normally granted to international development institutions.
Between 1976 and mid-July 2017, OFID has committed a total of more than US$55 million to Guyana via the organization’s 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 the Republic’s energy, agriculture and financial sectors.
*Endorsed by the Interim and Development Committees of the World Bank and the International Monetary Fund in September 1996, the Initiative represented a unified effort by the international community to address the external debt problems of the world’s heavily indebted poor countries.