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Guyana to pay back US EXIM Bank US$316.2M in interest on US$527M Gas-to-Energy loan
Kaieteur News- On May 1, 2031, Guyana will commence repaying the United States Export Import (US EXIM) Bank for a US$527 million loan the institution approved on December 26, 2024.
Over the 15-year repayment period, Guyana will pay the bank a whopping US$316.2M in interest. This means the country will be paying the Bank a total of US$843.2M overall for the amount it borrowed. The terms of the loan agreement were disclosed by Vice President, Bharrat Jagdeo on Friday during his weekly press conference at Freedom House, Georgetown.
Guyana to pay back US EXIM Bank US$316.2M in interest on US$527M Gas-to-Energy loan
“The interest rate is 4% so if you calculate it over the period, but remember there are moratoriums and all of that so it’s a 4% interest and you can calculate what the repayment would be over a time period. It’s fixed at 4%…principal repayment is 30 semi-annual installments…so its 15 years thereafter,” the VP disclosed.
He said the country will be required to make two annual payments on November 1 and May 1, commencing on May 1, 2031. Back in April 2023 it was revealed that Guyana applied to the Bank for a US$646M loan to support the NGL and power plant.
The country’s application was subject to a rigorous review, especially in the absence of a feasibility and environmental study. Jagdeo said the Bank conducted its own analysis before making its final determination.
The EXIM Bank loan will support the US$759 million cost of the natural gas-fired power plant and natural gas liquids plant being constructed by a joint venture, CH4-Lindsayca. It is important to note that the Gas-to-Energy (GTE) project also comprises of a 12-inch diameter pipeline being developed by the Stabroek Block operator, ExxonMobil Guyana Limited. Exxon previously said the structure is expected to cost US$1B. Guyana is also expected to repay the contractor for the pipeline, although the repayment terms with the contractor have not been made clear to the public.
Jagdeo had previously explained that the country would purchase the gas being transported by Exxon to repay for the development. Notably, this cost does not mean that Guyana is paying for its own gas, instead, this was the mechanism cited to repay the contractor for its investment.
On the other hand, auditors found that costs related to the pipeline were included in Exxon’s cost recovery statements, meaning that the contractor was recouping its investment by taking Guyana’s oil.
According the initial audit report prepared by VHE of Exxon’s 2018- 2020 expenses, ExxonMobil claimed it spent some US$2.1M on the project during the period under review. “The Contractor included on the Cost Recovery Statement costs for ground and air surveys, mooring studies, and Contractor and Affiliate labour for the proposed gas-to-power pipeline and onshore NGL plant,” the auditors explained. The government is yet to make agreements for the GTE project public, despite repeated calls from the Opposition and other stakeholders. In the absence of these key documents, the project details remain sketchy with no clear outline on the cost recovery aspect, among others, of the initiative.
(Guyana to pay back US EXIM Bank US$316.2M in interest on US$527M Gas-to-Energy loan)
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