U.S. EXIM Bank issues “final” approval of US$500 million loan for gas-to-energy project, says will reduce greenhouse gases

Last Updated on Thursday, 26 December 2024, 19:55 by Writer

The Export-Import Bank of the United States (EXIM Bank) on Thursday approved a loan of US$$526,873,240 to Guyana for the construction of the natural gas-to-energy plant at Wales, West Bank Demerara, saying the project would reduce the amount of greenhouse gas emissions into the atmosphere.

EXIM Bank said without this gas-to-energy project, Guyana will continue to import fuel oil, one of the highest polluting fossil fuels, and be unable to decommission hundreds of less efficient local generators. “This project will result in a reduction of more than 460,000 tonnes of carbon dioxide per year, the equivalent of consuming more than one billion barrels of oil,” EXIM Bank said in a statement.

EXIM Bank issued its final approval on Thursday, despite lobbying by several political, environmental and civil society activists and efforts by the opposition Alliance For Change (AFC) to pour cold water on the provisional approval by the bank more than one month ago pending a 35-day notification period by the U.S. Congress. Though the bank had officially confirmed its provisional approval, AFC Chairman David Patterson insisted that the loan was not approved.

The half-billion-dollar financing from Thursday’s approval will support the construction of a state of the art natural gas separation plant, a 300 MW combined cycle gas turbine power plant, and services related to the gas supply pipeline located at Wales, West Bank Demerara.

EXIM Bank also says this project will allow Guyana to transition to more reliable and cleaner energy for consumers and businesses by using natural gas to generate electricity. The bank adds that the project will also enable Guyana to strengthen its energy security by doubling the country’s installed electric capacity and unlocking economic growth potential for local Guyanese companies of all sizes. The United States Embassy is proud of this historic project and partnership.

“I am extremely pleased that the Board of Directors approved today’s Gas-to-Energy Project,” said President and Chair Reta Jo Lewis. “I am especially proud to continue to support Bank priorities and charter mandates along with projects that align with the Administration’s economic, energy, and national security priorities.”

The financing will support a U.S. joint venture involving Lindsayca, a Texas-based company, and Puerto Rican small business, CH4 Systems, and services provided by ExxonMobil. This work is being conducted by U.S. and Guyanese companies. Eighty-five of the 500 employees currently supporting this project on site are Guyanese. EXIM Bank also says financing will support more than one dozen U.S. companies. This transaction is expected to support an estimated 1,500 jobs across eleven states and territories.

U.S. Ambassador to Guyana, Nicole Theriot said, “I am thrilled that the Board has approved the financing for this groundbreaking project.” She added, “By working with U.S. companies, Guyana will benefit from a first-in-class power plant where quality and safety are at the forefront. We look forward to even more transformational projects where U.S. and Guyanese companies can partner for the benefit of the Guyanese people.”

The bank says this project also falls under EXIM’s China and Transformational Exports Program (CTEP) mandate, as the numerous U.S. companies that were ultimately awarded the contract faced direct competition from the People’s Republic of China.