US Exim Bank approves Guyana’s loan for GTE project – Jagdeo

Nov 29, 2024 News

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…Says approved amount is less than US$660M

Kaieteur News- The US Exim Bank has approved a loan for Guyana’s Gas-to-Energy project, Vice President Bharrat Jagdeo announced on Thursday.

The Vice President was asked to provide an update on the progress of the loan. “For a few weeks now, we had this information, but we wanted the announcement to come from Exim Bank, but since it has now been forthcoming, let me say to you that the loan has been approved.”

As of November 21, the approval was sent for a 30-day approval to the Congress, after which it will return to the Exim Bank’s board for the final approval.

“So that is where we stand at this point in…in time,” Jagdeo said.

When pressed further by the media, the VP explained that though the original application was for $660M this will not be the sum received.

“No, the amount will not be $660 million, it will be less than that, and it will only cover the exports out of the United States of America. So, it would be upwards of $500 million, upwards of 500 million.”

He added that the loan will be providing retroactive financing, so if it is made available it will be covering financing that the government had to make since the start of the project.

On September 8, Kaieteur News reported that Senior Minister in the Office of the President with responsibility for Finance and the Public Service Dr. Ashni Singh met and held discussions on Gas-to-Energy project with the Senior Advisor to the President and Chair, Mr. Larry T. Decker, and other senior and technical officials of the Export-Import (EXIM) Bank of the United States (U.S.) in Washington DC.

According to a statement released by the Ministry of Finance, the meeting took place during the Senior Minister’s four-day visit to the US.

The EXIM Bank was at the time still considering approval of a loan to Guyana, valued at approximately US$646 million. The loan is meant to support the Gas-to-Energy project.

As a result, during the visit discussions surrounded the bank’s support towards the project, which, when completed, is expected to significantly reduce electricity costs, increase the competitiveness of other industries, and reduce the nation’s reliance on heavy fossil fuels.

At the meeting, Dr. Singh expressed appreciation to the Bank for its continued support to Guyana, and reiterated that the Government values greatly, its relationship with the Bank.

Dr. Singh met and held discussions with several other high-level officials as Guyana has been partnering in several areas such as economic growth, trade and development including enhanced security.

There has been a lot of talk surrounding the loan, in January of this year International Lawyer, Melinda Janki had written to the United States Export Import (US-EXIM) Bank urging the financial institution to “respect the rule of law in Guyana” and withhold funding for the gas plants to be built at Wales, West Bank Demerara.

Janki on behalf of public interest litigants Elizabeth Deane-Hughes and Vanda Radzik wrote to the Bank 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.”

In June of this year, it was reported by the Kaieteur News that more than 16,000 Americans had written to Chair of the United States Export-Import Bank (US-EXIM), Reta Jo Lewis demanding the financial institution not to fund the controversial Gas-to-Energy (GTE) project being pursued by the Government of Guyana (GoG).

According to a letter from 16,452 members of Friends of the Earth United States, a non-governmental organization, the project is both a disaster for Guyana and the climate.

They said, “This project is both a disaster for Guyana and the climate! The U.S. government should not be using taxpayer dollars to subsidize Exxon – a company that has recently reported billions in profits.”

The advocacy group in the missive issued late last month went on to point out that studies done indicate that the gas project is not necessary as solar panels could provide a cheaper alternate of power generation. According to the letter, “This fossil fuel project in Guyana is not even close to necessary. Some analyses have shown that installing solar panels would meet the energy needs of Guyanese communities. Moreover, it would cost less to build, reduce bills for ratepayers, generate local jobs, and fight the climate crisis.”

The letter also pointed out that “This project will help increase the world’s dependence on fossil fuels and make limiting global warming to 1.5°C even more difficult.” and that “greedy companies [like] ExxonMobil will get even richer!”

The activist group noted that the letter was sent in solidarity with Guyanese citizens who are opposing the gas project on multiple grounds including the failure to carry out an environmental impact assessment for the gas plant; the lack of a business case; the lack of any financial information showing how spending billions of US dollars would deliver ‘cheap’ electricity; the failure to comply with national law and environmental risks involved with the project.

(US Exim Bank approves Guyana’s loan for GTE project)

(Guyana’s loan for GTE)

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• approved, Jagdeo, loan, US-EXIM bank, VP

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