IDB pulled millions of dollars in investments to mitigate urgent integrity risks

Oct 14, 2018 News

The Inter-American Development Bank (IDB) has been Guyana’s largest development funder for several years. But it had cause to pull millions of dollars in investments to Guyana due to urgent integrity risks.

This was revealed in a damning evaluation report on monies disbursed under a programme called the 2012-2016 Guyana Country Strategy (CS).

The report states that from 2006 to 2013, disbursements to Guyana averaged US$51.3 million per year, but they dropped dramatically after 2013, reaching US$14.9 million in 2016. Net cash flows to Guyana during 2015 and 2016 were negative, and the CS period concluded with an undisbursed balance of US$236.1 million.

The deed had already been done by the previous administration.

During the CS period, the Bank’s Office of Institutional Integrity (OII) conducted investigations related to seven operations based on nine allegations of prohibited practices. The report said that the allegations of four of the eight cases that closed during the CS period were substantiated.

Further to this, the Bank said that its supervision directly contributed to the detection of integrity concerns in about half of the allegations investigated. It was stated, too, that low capacity and staff turnover in executing units and lack of scale and capacity in the private sector (especially in infrastructure) also contributed to the slow pace of disbursements.

It was noted that limited progress was made toward achieving the programme’s proposed outcomes, as most active operations were implemented slowly. The Bank highlighted that during the CS period, the programme in sustainable energy was unable to significantly reduce electricity losses or improve the capabilities of the public energy company due to the slow start up of implementation.

It said that the programme in private sector development had very limited scale and scope, while the programme in public sector management consisted mainly of narrowly focused technical cooperation operations, which limited their capacity to contribute to CS outcomes.

The Bank said that the operations in areas not defined in the CS as priorities suffered from poor implementation, and their results were less than expected.

That said, the Bank did note that the programme made significant progress in two areas, natural resource management and housing. The Bank said it helped to enhance Guyana’s policy and regulatory framework governing the environment sector and to develop a monitoring, reporting, and verification system to measure the level of deforestation and forest degradation.

It said that international experts have recognized Guyana’s system as robust, which is important for participating in mechanisms that provide payments for environmental services, including the GRIF. (KIANA WILBURG)