VP Jagdeo doubts citizens’ letter to EXIM Bank will affect loan for Wales gas project

Jan 20, 2024 ExxonMobil, News, Oil & Gas

An artist’s impression of the Natural Gas Plant (Source: EEPGL)

Kaieteur News – Vice President Bharrat Jagdeo on Thursday said he doubts the letter penned by International Attorney-at-Law, Melinda Janki would affect the loan application to the United States Export Import (US-EXIM) Bank for the gas plants to be built at Wales, West Bank Demerara (WBD).

In April last year, the government applied to the US-EXIM Bank for a US$646 million loan to support the gas plants. The loan is intended to support the US$759 million cost of the natural gas-fired power plant and natural gas liquids plant to be constructed by contractor CH4-Lindsayca. The two gas plants are components of the Gas-to-Energy project which features a pipeline being financed by ExxonMobil.

In an invited comment during his weekly press conference hosted at the Office of the President, Jagdeo told this newspaper that the citizens who wrote the Bank to block funding for the project “are hopelessly misguided”.

The Attorney, on behalf of litigants Elizabeth Deane-Hughes and Vanda Radzik wrote to the institution on January 12, 2024. In the letter addressed to President and Chair of the Board of Directors, Reta Jo Lewis, the Lawyer pointed out that Guyana’s High Court on October 5, 2023 concluded that “…the decision by the EPA to grant the permit to Esso Guyana was contrary to law and was improper.”

Consequently, Janki said, “Eximbank should not provide funding for any project which is based on a decision (the grant of a permit) that is ‘contrary to law’. Eximbank should respect the rule of law in Guyana.”

According to Jagdeo, those citizens belong to groups that do not wish to see development in countries like Guyana. In fact, he accused the citizens of being paid for this cause.

“They are stuck here because I believe many of them are financed, they get resources from groups that want the developed world to remain or the developing world, undeveloped…their voices have no resonance in policy making in the big countries. They can’t stop the US growing its production of fossil fuel but they come to countries like us and have agents who do this sort of thing and that group fall into that category, and they are trying to block this regardless of its impact on our people,” Jagdeo stated.

The policymaker argued that these groups have no regard for the benefits of the project and its ability to reduce electricity costs by 50 percent by as early as next year. Even with no study to support this position, the VP asserted that the citizens are not bothered that the project will save the country US$100 million annually.

“They don’t care that we will save US$100M per year by doing this project. They don’t care that we’d have cheaper cooking gas and we’d be exporting cooking gas. They don’t care that this project can pay for itself, the economics are so good,” he said.

Meanwhile, the Vice President argued that there may be a concerted effort from an individual to hamper the project since her land would be affected by the pipeline that will be used to transport the gas from the offshore Liza fields in the Stabroek Block to the Wales site.

The former President said, “It is an individual interest that is playing out here so the EXIM Bank is very much aware of what is going on here in Guyana. They have technical people who follow every single day what is going on. They can discern serious interest or serious concern from concern of a propagandistic nature or a doctrinaire nature and in this case that’s what it’s doing and all they have to do is to check the same names on every issue and you will see them appear on every other matter so I doubt it’s going to have any impact on EXIM Bank and the provision of the loan.”

He explained that the US financial institution will conduct its own due diligence to determine the feasibility of the project and its related environmental concerns. Following that exercise he said he is positive that the project will receive approval for funding.

While government awaits funding from the US EXIM Bank for the project, it has been utilizing resources from the national purse to pay for the construction activities.