$30Billion GuySuCo bond, no factor on foreign reserves – Minister Jordan

DPI, Guyana, Friday, July 27, 2018

Minister of Finance, Winston Jordan is confident that the recently secured $30Billion syndicated bond to revitalise the Guyana Sugar Corporation (GuySuCo) will not put pressure on foreign reserves.

Recently, it was claimed that when spending of the $30Billion bond begins, it will substantially increase the demand for foreign currency and put pressure on the reserves.

However, at a press conference today at the Ministry of Finance, Minister Jordan told reporters, that when it comes to the foreign subscription part of the bond, “they’re going to bring in foreign currency which obviously is going to be sold to the Bank of Guyana, thus boosting their reserves. So, the statement that it’s going to put pressure on the foreign reserves for the Bank of Guyana doesn’t hold much water.”

He went on to say that the larger issue was that the very opposition that “bruk up” GuySuCo, and put it in its current state are the very people who want nothing to be done for the cash-strapped company.

“The $30Billion bond we took is not to pay wages to public servants but to rescue GuySuCo. You would think there would be more sympathy and support for rescuing that entity by plugging in the kind of financing that we have been able to attract so that GuySuCo can come back on its feet; not as expanded before but in a way where it can stand on its own feet.”

GuySuCo had incurred a debt of more than $82Billion by 2015 with the government bailing out the cash-strapped sugar corporation with billions of dollars in annual subventions. Since 2015, government subsidies to GuySuCo were around $32Billion.

“Most of the comments coming from the opposition seem to suggest that we were wrong to attract financing to bring GuySuCo out of the struggles. But we will try to push as fast as possible to get it out of its struggles,” Minister Jordan said.

The bond was secured by the Special Purpose Unit (SPU) of the National Industrial and Commercial Investments Limited (NICIL).  The SPU has said that GuySuCo needs $30Billion, over a four-year period, to provide a much-needed capital injection, support infrastructure maintenance and upgrades at the Albion, Blairmont, and Uitvlugt estates, which the state is keeping, and to develop new co-generation capacity to support estate operations and sell to the national power grid.

Ranetta La Fleur and Stephon Gabriel

Image: Kawise Wishart