News Americas, GEORGETOWN, Guyana, Weds. July 11, 2023: The latest report on ‘Foreign Direct Investment in Latin America and the Caribbean’ by the United Nations (UN) Economic Commission for Latin America and the Caribbean (ECLAC), show that Guyana has emerged as the top destination for Foreign Direct Investment (FDI) in the Caribbean for the year 2022. The country witnessed a record-breaking inflow of $4.389 billion.
The remarkable performance can be attributed to the growing interest of foreign investors in Guyana’s hydrocarbon sector. In fact, the natural resources industry accounted for 99% of the total FDI inflows in 2022, despite experiencing a 2% decrease compared to the previous year.
This isn’t the first time Guyana has achieved the highest FDI inflows. In 2021 as well, the country secured the top position in attracting foreign investments.
The ECLAC report also highlights that Guyana’s future looks promising, as the country’s hydrocarbon sector is expected to continue attracting significant investments in the upcoming years. Several announcements made in 2022 indicate sustained interest from investors in Guyana’s oil and gas industry.
Furthermore, the report emphasizes that the influx of FDI in the non-renewable energies sector across Latin America and the Caribbean is influenced by factors such as international market fluctuations in energy prices, the discovery of new hydrocarbon sources in the region, and changes in local market structures. Notably, six countries, including Brazil, Colombia, Guyana, Mexico, the Plurinational State of Bolivia, and Trinidad and Tobago, have witnessed substantial FDI inflows into their hydrocarbon sectors, with an average annual investment of $7.214 billion between 2000 and 2022.
The report points out that larger FDI inflows in certain years can be attributed to the discovery of oil reserves, exemplified by Guyana’s case. Since 2018, Guyana has experienced a significant surge in FDI inflows in the hydrocarbon sector, with an average annual investment of $814 million, compared to just $6 million per year between 2002 and 2011. As a result, the sector has accounted for more than 90% of the country’s total FDI inflows.
Guyana’s impressive growth in the oil industry can be traced back to the discovery of offshore oil deposits in 2015, largely driven by the exploration efforts of US oil company ExxonMobil. Since then, the country has consistently expanded its oil reserves, production, and revenue derived from oil production.
The report also highlights the notable contributions of Guyana and Mexico to the growth of the coal, oil and gas, and renewable energy sectors in 2022. This growth can be attributed to higher global energy prices and ongoing efforts towards energy transition. In fact, Guyana and Mexico accounted for 93% of the total project investments, surpassing $22 billion, in these sectors.
Additionally, the renewable energy sector experienced significant growth, with investments close to $11 billion and a 40% increase compared to the previous year. Noteworthy projects, including oil extraction initiatives in Guyana, have also contributed to the sector’s expansion, particularly in the United States.
Overall, Guyana’s remarkable FDI inflows and its strategic focus on the hydrocarbon sector position the country as a key player in attracting foreign investments in the Caribbean region.