-following November 21st meeting
United States Exim Bank (US EXIM) officials on Thursday met to discuss the US$660 million loan for this country’s gas-to-energy project but no decision has yet been made and the project is listed in the pending category 17 months on.
Notification to the US Congress has also been noted as being required. With the life of this congress coming to an end shortly it is not expected that projects such as Guyana’s gas to energy will be prioritized.
In the meanwhile, a US$500 million loan – which will cover energy renewables and other areas -has been granted to Barbados.
The specific outcome of Thursday’s meeting is unknown and it is also unclear if government here was notified of any actions taken. Calls yesterday to both Vice President Bharrat Jagdeo, Senior Minister in the Office of the President with Responsibility for Finance and the Public Service, Dr Ashni Singh, and Project Lead, Winston Brassington, went unanswered.
US EXIM listed the departments with responsibility for various aspects of the deal and updated their status.
For the Office of Board Authorized Finance, Structured & Project Finance Division, it listed this country’s project number as – AP089490. “Borrower/PSOR/End-User: Ministry of Finance of the Cooperative Repub-lic of Guyana Exporter” and the “Supplier: Lindsayca, CH4 Systems, and ExxonMobil.” For products, it listed steam generators, separation and conditioning equipment, project management and engineering services
That Network Asset Control was required, it stated yes, while also pointing out that Congressional Notification is also required. Required Public Notice and Comment was listed as needed along with notification to Congress as the required decision. The Bank’s Office of Risk Management had to also review its Long-term High Risk (LTHR) and Short-term Only Risk (STOR) Policies as this was review. It stated that the decision required by that department was an approval. An approval decision is also required from the bank’s Enterprise Risk Commit-tee.
On Monday, US EXIM announced that it had signed two significant memoranda of understanding (MoUs) with the governments of Barbados and Saint Kitts and Nevis, securing a total of up to US$800 million in potential financing to support financing in cybersecurity, renewable energy, and critical areas for the region’s long-term growth and sustainability.
“These agreements are a symbol of the US’s deepening partnership with Barbados and Saint Kitts and Nevis – and the entire Eastern Caribbean region,” said Chair Reta-Jo Lewis. “The agreements send a signal to the market that EXIM is eager to finance meaningful projects that support new business opportunities in key sectors across the United States and the Eastern Caribbean. This is what strategic partnerships between the U.S. and our key allies look like.”
The Bank said that the MoU between EXIM and the government of Barbados, “in the amount of up to [US]$500 million in financing, was signed by Chair Lewis and Prime Minister Mia Mottley in the Office of the Prime Minister with Ambassador Roger Nyhus. Areas for cooperation and procurement included renewable energy, cybersecurity, water and sanitation and maritime domain awareness.”
“The United States Embassy in Bridgetown is proud to have played a leadership role in making these agreements possible,” said US Ambassador to Barbados, the Eastern Caribbean and the OECS, Roger Nyhus. “EXIM and Chair Lewis are incredible partners who care about this important part of the world. The MoUs signed today are tangible examples of the commitment made by the United States to economic development, security, and a shared future with the countries of the Eastern Caribbean.”
The MoU between Saint Kitts and Nevis, providing access to up to $300 million in financing was signed by Chair Lewis and Prime Minister Terrance Michael Drew at the US Embassy in Bridgetown, hosted by Ambassador Nyhus. Areas for cooperation and procurement included renewable energy, cybersecurity, critical minerals and infrastructure.
In September, Vice President Bharrat Jagdeo had said that the bank’s board was likely to discuss the US$660 million funding for the Gas-to-Energy (GtE) project at an October meeting.
“They are aiming to go to the Board by October [for a] Board meeting, but all of the technical and environmental work has been completed and they have all of the information necessary to go to the Board,” Jagdeo had said.
The Vice President, who also holds oversight for the oil and gas sector, said that the Finance Minister will provide additional details on the meeting. “Ashni Singh met with EXIM Bank and he is going to tell you about it and that they have indicated that they have all of the information they need to go to the Board.”
The following Saturday, a press release from the Ministry of Finance stated that Minister of Finance Dr Ashni Singh had met with the Senior Advisor to the President and Chair, Larry T. Decker, and other senior and technical officials of the Export-Import (EXIM) Bank of the United States in Washington DC, where discussions surrounding the Bank’s support for the GtE project which the government has said will cut energy charges by half.
The press release had varied from the constant line of a 50 per cent cut by stating it would “significantly reduce electricity costs.”
The project “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. During that high-level meeting, Dr. Singh also expressed appreciation to the Bank for their continued support to Guyana, and reiterated that the Government values greatly, its relationship with the Bank,” the release had stated.
There has been no further word on the fate of the project financing since then.
The government has vowed to find alternative means to finance the gas project if the US EXIM Bank funding isn’t approved.
In the face of a delay to the US$660 million loan application, Jagdeo said in February this year that Guyana would consider other plans.
“I don’t want to speculate about the EXIM Bank funding because we anticipate that the funding will be available, and as I have said before, it would be retroactive funding. However, without disclosing the sources that we have, we have already been talking about a contingent line of credit that could easily supplant that,” he told a press conference at Freedom House in Georgetown.
“Secondly, from the Budget. We have already been financing, beyond the first US$100 million that we have put into the project, from budgetary sources. So that is the first year. We have been making payments to the company from the budget. So those are the two sources – [our] own revenue from the Budget and from a contingent line of credit that we are already discussing,” he added.
In July 2022, the Government of Guyana and the EXIM Bank of the United States signed a historic US$2 billion MoU, with specific focus on infrastructure, energy, water and sanitation, information and communications technology, and agriculture. Then in April of 2023, Guyana made the US$660 million loan application.
