US EXIM-Bank conducted due diligence on gas-to-energy project before loan approval

–  Loan would not have been approved if project was ‘unfeasible’

The United States Export-Import Bank of the United State (Exim Bank) has announced the approval of a US$526 million loan for Guyana, following an independent, technical and environmental feasibility study on the gas-to-energy project.

General Secretary of the People’s Progressive Party (PPP), Dr Bharrat Jagdeo reiterated the significance of the move on Thursday, in response to previous criticisms and doubts about the loan approval. 

According to him, before approving the loan, EXIM Bank has conducted a thorough review to determine the viability of the venture; this could have been blocked, if necessary, standards were not met.

“Before this loan went to their (US EXIM Bank) board, they had to answer all of those questions,” he further explained, adding, “This loan went to the United States Congress and it would have been blocked by the Congress if we didn’t have adequate answers.

The general secretary, who also serves as vice president, in November informed the nation that the project received an initial approval, after which it was sent to the US Congress for a mandatory 30-day notification.

And on Thursday, President, Dr Mohamed Irfaan Ali was notified by President and Chair of the United States Export-Import (EXIM) Bank, Ms. Reta Jo Lewis of the approval.

This major undertaking is aligned with the government’s push to transition to renewables, as underscored by an official press release from the financial institution. 

“For those people who have been opposed to the project and said, it’s a fossil fuel project, I just want to draw their attention to what the press release from EXIM Bank pointed out,” Jagdeo said, noting that it will reduce 460,000 tons of carbon emission annually, equivalent to the emissions from approximately 1 million barrels of oil per year.

In addition, the government will be saving approximately $100 million annually on fuel costs, while electricity costs will be slashed by 50 per cent, leading to an annual saving of $250 million. 

He further explained, “It has an impact on both balance of payment of the country and also in the pockets of Guyanese companies and individuals”, adding that it will deliver substantial benefits to Guyanese citizens, with strong support from the US Government.

Jagdeo expressed satisfaction with the loan approval, making it clear that the financial resources will only fund a mere 25 per cent of the project. Approximately $2 billion is required to construct the major facility, with the government expending its own resources to finance the rest of the project, including through a partnership with ExxonMobil.

Meanwhile, he said the approval effectively rejects the misinformation peddled by the Alliance for Change (AFC), demonstrating their lack of credibility as a political party.

When completed, approximately 300MW of power will be added to the grid, expanding electricity supply and cutting Guyana’s footprint per kilowatt hour, and reducing energy costs by a massive 50 per cent.

This project will see the construction of an integrated gas processing facility at Wales, West Bank Demerara in Region Three, that will allow natural gas to be transported offshore Stabroek Block’s Liza oilfield.