News

IBD Fund Approved to Support Small Guyanese Enterprises in Low-Carbon Sectors

IDB28 February 2013: Approved by it's Board of Directors on 27 February 2013, the Inter-American Development Bank (IDB) will administer a US$5 million grant program to support implementation of the portion of Guyana's Low Carbon Development Strategy (LCDS) devoted to expanding microfinance for micro and small enterprises in low-carbon sectors (LCSs).

The program will target help to two sets of LCSs as identified in Guyana's LCDS: "high priority" LCSs, which include sustainable forestry and wood processing, bioethanol, ecotourism, aquaculture, fruit and vegetable farming and processing, and business process outsourcing; and "other" LCS, which include low-carbon energy production and/or distribution, energy-efficient transport and logistics, low-carbon manufacturing, low carbon agriculture, sustainable mining, and internet and computer-based services, entertainment, music, performing arts, and publishing.

The program's "access to finance" component has three subcomponents: a Credit Guarantee Fund (CGF); an Interest Payment Support Facility (IPSF); and a Low Carbon Grant Scheme. The CGF will be used to guarantee up to 40% of the collateral requirements in loans made by partner financial institutions (PFIs) to small firms in target LCSs. The IPSF will subsidize lower interest rates for loans in priority LCSs. The Scheme will provide small grants of up to US$1,500 to help LCSs expand their businesses.

The program's second component will provide resources for technical and business development training of participants in the program, not only in sound business practices in areas such as accounting, marketing and business plan preparation, but also in technical subjects such as use and maintenance of energy efficient technologies or sustainable farming practices.

The US$5 million grant is financed with resources from the Guyana REDD+ Investment Fund (GRIF) Trust fund. It will be executed by Guyana's Small Business Bureau (SBB) in coordination with the IDB, the World Bank's International Development Association (IDA) and Norway's Ministry of Foreign Affairs. [IDB Press Release]