US Senator says Pres Ali was annoyed US blocked loan to GYSBI; US vows to push back on Chinese investments

Last Updated on Saturday, 29 April 2023, 8:50 by Denis Chabrol

United States Senator Tim Kaine has said that President Irfaan Ali was upset that that country had blocked an Inter-American Development Bank  (IDB) US$180 million loan to Guyana Shore Base Inc (GYSBI) because its operations were dedicated to the oil and gas sector and even cautioned that China could provide financing “with no strings attached.”

Recalling a meeting with Dr Ali last July, after the US had vetoed the loan, he said the Guyanese leader did not hide the fact that they were “incredibly disappointed”. “The point that President Ali made to me, and others have as well is that ‘ok, you say you are an ally, you should want us to develop our economy just like you develop yours’. Yes, that’s true. ‘You say that you want to help nations wean themselves away from over-reliance on petro-dictators like Venezuela or Russia or Iran or Saudi Arabia and have more energy available to back-stop if they move away from petro-dictators’. Yes, that’s American policy.

‘You’re blocking us, then from doing those things, developing our own economy and creating a resource that can help people move away from petro-dictators but you’re blocking us in a foolish way because we can go to China and get these investments and without the strings attached’,” he said at US Senate Committee on Foreign Relations hearing for the nominee of new Ambassador to Guyana, Nicole D. Theriot on March 30, 2023.

Suriname, and Trinidad and Tobago leaders, he said, were also concerned that the US was preventing the development of their energy resources and their economies.

The Guyana government has repeatedly stated that China is an important partner in Guyana’s economic development. Apart from ExxonMobil, the US’ single largest private sector investment in Guyana is the US$759 million contract to CH/LINDSAYCA to build the natural gas-fired power and natural gas liquids plants at Wales, West Bank Demerara. Power China had offered to build the plants for US$704 million.

In that regard, Ms Theriot noted that the Guyana government appeared willing to pay more for higher quality projects. “US companies provide quality, reliability and sustainability. And the Guyanese have shown that and because of their newfound oil wealth, they no longer have to always go with the lowest bidder for important infrastructure and other projects. Instead, they can now go to the quality, reliable company and they’ve shown that in November of 2022, the largest tender ever awarded in Guyana went to a US consortium even though that consortiums bid was higher than the other bidders. and that’s because they bring what Guyana is now looking forward to the table,” she said. 

Senator Kaine recommended that the US government should have a phased approach of helping allies develop their economies, wean themselves of off petro-dictators and combat climate change. He warned that if the US Congress did not find a combined solution, countries like Guyana could increasingly turn to China. “It’s taking allies that are good allies and pushing them away from us. I think that there is a strategy that could be articulated by the administration that probably could be a phased strategy that here we are during this war and it is imposing significant challenges for nations that have relied on petro-dictators. We need to have a strategy that can at time move nations away. We do want to help allied nations develop their economies, be a partner in them. We don’t want them to go to China to get resources when there are resources that are available that we can provide them with,” he said.

Senator Pete Ricketts, for his part, also criticised the Joe Biden administration’s decision and agreed with Dr Ali. “I think that’s shortsighted given that China has no such restrictions in aggressively signing contracts to build infrastructure in Guyana and around the world and certainly, I think we would all agree that we would want to do a better job than that,” he remarked.

Ms Theriot acknowledged at the hearing that the Guyana government was upset that the US had blocked the loan. “They were quite displeased,” she said. But, she did not believe that the Guyana government  viewed the US as an unreliable partner and would return to China. “No sir, I don’t think that’s the case and they have shown time and time again that we are the preferred partner of the US government and US companies,” she said.

Senator Ricketts observed that the Biden administration has contrastingly lifted sanctions that had been imposed on Venezuela’s Nicolas Maduro “authoritarian” regime to boost oil production.

The ambassadorial nominee stayed clear of criticising the US’ decision to veto the loan at the IDB, but promised to do all she could “diligently” to facilitate American investments coming to Guyana. “What I would do if confirmed is to make sure there is a level playing field for US companies in Guyana. I think that is our entrée into ensuring that China does not take over this industry. I think it’s incredibly important that we remain the preferred partner in Guyana whether it be the US government for security cooperation or US companies for oil and gas development,” she said.

Ms Theriot noted that the US loan veto to GYSBI was made in March, 2022 but since then energy security has emerged as a real concern and significant issue due to the Russia-Ukraine war. She said at that time the US had blocked the loan because it was not in line with the Biden administration’s position that it would not contribute to the further development of oil and gas. “I think because that is no longer an issue, we can only move forward and work to ensure that US companies are given a level playing field in the country,” she added. Scientists say fossil fuel emission of greenhouse gases contribute to climate change leading to severe floods, droughts, devastating storms and rising sea levels.

Asked by Senator Ricketts whether she believed that the IDB should approve the loan if it returns to that financial institution for approval, she declined to speculate.

If approved, Ms Theriot would replace incumbent Ambassador Sarah-Ann Lynch who should have returned to Washington last year-end a she has already gone beyond her three-year tour of duty.

Ms Theriot is not new to the Caribbean as she has served the US Foreign Service in Barbados and Haiti.