A US senator has taken the Biden administration to task for its failure to support energy projects in Guyana via its vote at the Inter-American Development Bank (IDB).
The senator in question, Marco Rubio (R-FL) wrote to President Joe Biden on March 25 expressing concern over his administration’s veto of IDB loans to local energy projects and willingness to instead confer with authoritarian, undemocratic regimes.
Rubio, among other portfolios, is a senior member of the Senate Committee on Foreign Relations and Ranking Member of the Foreign Relations Subcommittee on Western Hemisphere.
In a release from Rubio’s office which included the full text of the letter, the Republican senator urged Biden to take urgent action to uphold the United States’ longstanding policy of supporting and strengthening its allies in the Western Hemisphere.
“As we work together to address the immediate challenge of confronting Putin’s aggressive authoritarianism and decreasing our dependence on his energy reserves, it is just as important that we do so in a way that strengthens our alliances with other democracies.”
Reference was made to media reports that stated that last October the administration had exercised the vote of the United States in the IDB to decide against lending US$180 million to a project that would have expanded infrastructure necessary to support Guyana’s budding energy industry. It highlighted that the project included expanding port and shore facilities to accommodate larger ships, constructing a waste management facility and building a US$10 million solar power project.
The letter argued that the project in question would not only have supported the growth of Guyana’s economy, but would have also helped address rising energy prices in the United States by supporting an expansion of Guyana’s capacity to produce and export more oil. As well, the project would have also invested in solar power capabilities.
Taking a disapproving tone, the missive remonstrated with the US president for choosing to work behind closed doors to lift sanctions on the fossil fuel industries controlled by the Maduro regime in Venezuela and the Ayatollahs in Iran, instead of supporting common sense projects that would strengthen US relationships with its allies and help the domestic energy crisis.
“Therefore, I urge you, before seeking to convince bloodthirsty dictators to enter into misguided deals, explore supporting projects in democratic countries that actually want to work closer with us. Doing so will require no moral compromise on our part, while still reaping benefits for the American people,” Rubio said.
Stabroek News had reported exclusively last month that the United States used its voting power in October last year on the Board of the IDB to deny Guyana Shore Base Incorporated (GYSBI) a US$180 million loan after it had gone through a two-year approval process.
The company had approached the IDB for financing to facilitate its expansion plans to service the growing oil and gas sector and went through all the regulatory phases.
The summary of the proposal, submitted in April of last year, stated that the company was seeking the support of IDB to refinance certain existing bridge loans, expand GYSBI’s port and shore base facilities through the construction of four additional berths, increase the size of the Shore Base logistics support area, develop and construct an infill project that would allow offloading of heavier cargo, purchase and construct a waste management facility, install rooftop solar photovoltaic (PV) capacity to meet GYSBI’s energy needs, and construct additional warehouse capacity.
Providing insight into the process that led to the loan being denied, GYSBI’s Chief Financial Officer Robert Albiez told Stabroek News that about two years ago the company approached the IDB since they were looking for large financing.
“We started looking at something a
little bit bigger and longer-term plans and we started to pursue a large scale financial project with the IDB. And it was about a two-year process. So it takes a great deal of due diligence on the legal side, the environmental side, the construction and engineering side. They (IDB) basically look at every single aspect of what you’re doing, make sure you’re doing all the right things in the local environment etcetera,” he said.
The company submitted to the IDB not only its expansion proposals but an Environmental Assessment and Environment Management Plan had already gotten approval from the Environmental Protection Agency.
This Environmental Assessment (EA) addressed the proposed improvements to the Port’s transport and logistics improvements and acknowledged that the Project could also potentially lead to “negative environmental and social impacts during its construction and operation.”
Albiez said that a US$10 million solar power project was also included in the proposal and that was voted down as well.
“The United States as a voting member on the approval board (of the IDB voted down the loan)… and a policy change in the White House had been directed to all of these lending institutions where the US cooperates, they would no longer be supporting any sort of funding to support the oil and gas industry.
Albiez said that the loan was denied by the US after President Biden came into office and effected sweeping changes as to the environmental mandate of his government. An executive decision was taken not to back new oil and gas development projects and according to the Finance Director, the US has been wielding that power with major financial institutions like the International Monetary Fund and the World Bank as well.
“IDB told us that they are not considering anything else, anything oil and gas-related in Guyana specifically. I don’t know what they’re doing worldwide, but their [IDB] lead told me that that was the deathblow for them developing any projects related to the oil and gas industry in Guyana…we reached out [to] IMF, World Bank [and] we were told the same thing that the US is using their leverage in their position as voting members on all of those boards to block any support.
“It was a very blunt instrument they used against us…I would like to be clear, I don’t feel that it was the IDB that let us down so much as the US interference and their direct mandate to not support the project,” he added.
