PETROCARIBE fund agreement did not cater for rice

Opposition Leader Bharrat Jagdeo said that the People’s Progressive Party (PPP) continue to defend its claim that it did nothing wrong that when it transferred US$115 from the PetroCaribe to the Guyana Power and Light while in power. Jagdeo on Monday stated that the agreement was a Caricom-wide initiative and have nothing to do with the rice industry and countries without a rice industry also benefited and used the money to fund whatever project they deemed important.

The Opposition leader said that in Guyana, it was decided that the bulk of the resources received for the oil credit facility would go into a system where Guyana would not take the loan but allow those processes to go for the payment of rice. He stated the agreement was for Venezuela to cancel the promissory note each time a shipment of rice arrived in Venezuela.

However, the Public Debt Report released last year indicated that Guyana Power & Light Inc. (GPL) was the only state-owned agency that benefitted from an “on-lent loan”. The document found that the money was garnished from PetroCaribe fund and the end of 2015 and GPL had repaid less than one percent of that loan.

Jagdeo said that the money given to GPL was reflected in estimates of budget that year and maintains that the transfer of money was not a loan, however he offered no evidence or stated whether it was a formal agreement or not. He said that it was the government’s decision how to use the funds and what it would be used for.

“It had nothing to do with rice, but in our case we decided to use it in that regard. We made it clear that we spent some of the resources for other purposes for GPL to buy the new power plant at Vreed-en-Hoop and some other power plants,” Jagdeo said.

According to the “Energy Cooperation Agreement Petrocaribe” signed in 2005, Section I of the agreement established the body “PETROCARIRE” which “shall be furnished with a Ministerial Council formed by the Ministers of Energy or their equivalents” from both Venezuela and the participating member of the agreement and one function of said body was to “agree on and approve issues of absolute priority.”

In support of Jagdeo’s claims, the PetroCaribe body did not specify what programme or operation the funds were used for only that it had to be energy related.  According to section IV of the agreement, countries under the agreement had to implement energy related operations.

“Within the framework of PETPOCARIBE, state bodies shall be required to implement energy-related operations. Venezuela offers technical cooperation to support the creation of state agencies in countries not possessing qualified state institutions for this purpose.”

Also supporting Jagdeo, the agreement also allowed Venezuela to extend credit facilities to the countries of the Caribbean exhibiting less relative development on the basis of bilaterally fixed quotas. So depending on the quotas of oil arranged by a particular country, the repayment system would called for 50% payment within 90 days and the depending on the price of oil at the time, up to 25 years to repay the debt.

However in the Case of Guyana, under Deferred Payment section of the agreement, Venezuela had the option to into the “Rice agreement” in which the Venezuela would determine what would be paid in Goods and Services.

“With regard to deferred payments, Venezuela shall be able to determine the portion that shall be paid with goods and services for which it shall offer preferential rates.”


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