Guyana's Agriculture Minister, Robert Persaud, said the country was aiming for a 10 per cent mix of ethanol with regular gasoline to power vehicles.
The United Nations Economic Commission for Latin America and the Caribbean calculates such a step could save Guyana at least US$5.4 million annually on fuel imports.
Mr. Persaud said the IADB will provide technical assistance to Guyana in connection with potential projects by a Brazilian company and several US firms.
He said Guyana plans to set aside 50,000 acres of land in Canje, an agricultural plantation about 70 miles east of Georgetown, to plant special varieties of sugarcane.
These varieties have been identified as capable of yielding a large quantity of ethanol.
US industry experts have named Guyana and Jamaica among countries in the Americas with the capacity to expand sugar production for ethanol.
Many producers in Latin America and the Caribbean are looking to diversify and ethanol has become an attractive alternative sugar product.
Last month Brazil's President Luiz Ináácio Lula da Silva and U.S. President George W. Bush reaffirmed their interest in developing joint bio-fuels projects in Central America and the Caribbean.