Vice President Bharrat Jagdeo yesterday said that the board of the United States Export-Import (EXIM) Bank last week approved US$509m of the $US640m loan this country had requested for the gas-to-energy (GtE) project at Wales, West Bank Demerara, and has sent the document to the US Congress as part of a 30-day notification process.
“We had this information but we wanted the announcement to come from EXIM Bank. But since it [the information] has not been forthcoming, let me say to you that the loan has been approved by the Board of EXIM Bank and it has been sent to the Congress for 30-day notification,” the Vice President said at a press conference he hosted at Freedom House, Georgetown.
“After which, it will be returned to the Board of EXIM Bank for final approval. So that is where we stand at this point“, he added.
In explaining the reduction by almost US$131million, Jagdeo said, “It will only cover exports out of the United States of America…”
US EXIM Bank officials last Thursday met to discuss the US$660 million loan for this country’s GtE project but had said that a decision was yet to be made and the project was listed in the pending category.
Notification to the US Congress was also noted as being required. The life of this Congress will soon end with another scheduled for January 3, 2025.
The loan application had been pending for 17 months.
In September, Jagdeo had informed that the bank’s board was likely to discuss the US$660 million funding 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,” he had said.
The Vice President, who also holds oversight for the oil and gas sector, said that the Finance Minister would 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 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.
The government has vowed to find alternative means to finance the gas project if the US EXIM Bank funding isn’t approved.
When the money is disbursed, Jagdeo said that some it would be used to finance US exports and the remainder would go towards retroactive payments, as government has already been footing costs from the state’s coffers for the 300-megawatt electricity plant and natural gas liquids plants. “The loan will also provide retroactive financing, so if the loan is made available it will cover financing that the Government of Guyana had to make during the period since the project started,” the Vice President explained.
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.
