Guyana and OPEC Strike Agreement on Debt Relief

Text of report by Caribbean Media Corporation (CMC) news agency on 30 July

Georgetown, Guyana: Guyana and the Organization of Petroleum Exporting Countries (OPEC) have reached agreement on a multi- million dollar debt relief package.

Finance Minister Saisnarine Kowlessar who reported that negotiations “went well” said OPEC would deliver its full share of the Enhanced Highly Indebted Poor Countries (E-HIPC) initiative aimed at reducing the debt of a number of countries, including Guyana.

Under the agreement, the OPEC Fund will provide debt relief to Guyana (5.4m US dollars in Net Present Value (NPV) terms) by giving the country a new concessional loan in the amount of 7.5m US dollars and rescheduling the existing debt.

“Further, the government of Guyana will sign the proposed new loan agreement on the terms offered in 2002 on the condition that the new loan will be immediately rescheduled, after it has become effective,” a Government Information Agency (GINA) statement said.

Guyana and OPEC also agreed that the interest rate on rescheduled loans would be reduced from one to zero per cent and that “the maturity date of loans to be 25 years after the date of rescheduling.”

“Even though the discussions were a bit tough, eventually they agreed to grant us the concessions which will provide the debt relief,” Kowlessar said.

He added: “This agreement will mean savings of much needed revenue for Guyana since it will not have to service its debt on the current loan to the OPEC Fund on the existing terms of the Original HIPC initiative which carried higher interest rates and shorter repayment periods,” GINA said.