[www.inewsguyana.com] – Finance Minister Dr. Ashni Singh yesterday called on the international financial institutions and the regional development banks to provide more support to the energy sector in the Caribbean.
The Minister made the call while speaking at a high level Caribbean forum held in Jamaica over the past two days.
Minister Singh argued that unreliable and costly energy is one of the principal sources of uncompetitiveness in the Region, pointing out that apart from Trinidad and Tobago, most of the rest of the region is burdened with unreasonably high energy costs. He argued that this imposes a constraint to investment and growth, adds pressure on cost of living, and results in fiscal stress including as a result of inefficient energy subsidies that have to be provided by Governments to cushion the effect of high costs. He also argued that high energy costs and dependency on imported fossil fuels contributes to the Region’s macroeconomic vulnerability especially as a result of high and volatile imported oil prices, with concomitant pressure on the balance of payments and on domestic price inflation where there is price pass through.
Resolving the impediment of unreliable and costly energy requires scaled up investment including in renewable energy such as hydropower, Minister Singh argued, but pointed out that given the limited fiscal space available in most Caribbean countries, this investment would have to come from the private sector.
On this basis, Minister Singh called on region’s development partners, particularly the multilateral financial institutions and regional development banks to make a more concerted effort to help the Region mobilise private investment into the sector.
“The stark reality is that, with limited fiscal headroom and given the debt sustainability imperative, the investment required into the Caribbean’s energy sector will have to be financed by private capital. Tangible assistance to mobilise this capital should be a priority of the international and regional institutions providing development support to the Region,” Minister Singh stated.
Guyana is currently working closely with the Inter-American Development Bank to harness its hydropower potential through the Amaila Falls Hydropower Project. In addition, Minister Singh recently signed with the IDB and the EU agreements to finance more than US$64.6 M of investment into modernizing the energy sector.
The forum held in Jamaica was a collaboration between the International Monetary Fund (IMF) and Jamaica’s Ministry of Finance and Planning under the theme “Unlocking Growth in the Caribbean”. The event focused on ways to unlock growth in the region and examined key issues such as improving the reliability and efficiency of energy provision, a tax regime to encourage investment, and steps to strengthen the financial sector.