The Export-Import Bank of the United States (US Exim) has given preliminary approval for a loan agreement worth over US$500mn for a gas project in Guyana after a “long” due diligence process, a state official has said.
The deal, which is still subject to US congressional approval and final confirmation by US Exim’s board, would prop up American exports to a US$2bn gas-to-energy project in the South American country.
US engineering, procurement and construction (EPC) firms Lindsayca and CH4 Systems, and energy major ExxonMobil are all involved in the development.
Guyana’s energy project is comprised of a natural gas separation plant, a 300MW natural gas-fired power plant, as well as an onshore and nearshore pipeline which has already been constructed.
As shown in minutes from a November 21 meeting of US Exim’s board, US companies will supply steam generators, separation and conditioning equipment, as well as project management and engineering services.
Guyana’s Vice-President Bharrat Jagdeo said on November 28 that the country has managed to move from a memorandum of understanding with US Exim to a loan after a “long process, due diligence, like we did on a lot of the projects”.
As part of an MOU signed between the agency and Guyana’s government in 2022, the two sides agreed to “explore options” for utilising US Exim’s financing, insurance and guarantees on projects worth up to US$2bn in a range of sectors, such as infrastructure, energy and telecommunications.
Speaking at a press conference, Jagdeo said the financing would be US$500mn rather than the US$646mn that Guyana had reportedly applied for.
“For a few weeks now, we had this information but wanted the announcement to come from Exim Bank, but since it has not been forthcoming, let me say to you, the loan has been approved by the board of Exim Bank and sent to congress for 30 days notification. After which it will be returned to the board of Exim Bank for final approval. That is where we stand at this point in time.”
Jagdeo noted that US Exim’s funding would cover some of the costs already provided by the Guyanese state.
“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 the project started,” he said.
When contacted by GTR, a US Exim spokesperson declined to specify whether the agency would provide direct financing or a loan guarantee and said an announcement would be made upon final approval.
Climate activists have criticised US Exim for issuing billions of dollars in loans and guarantees for oil and gas projects, despite a pledge by President Joe Biden in 2021 to end overseas funding for fossil fuels.
Earlier this year, two advisors quit the agency’s climate advisory board over a US$500mn loan guarantee for an oil and gas field project in Bahrain.
The Washington DC-based agency has consistently maintained it is sector-agonistic and bound by its charter to cover all transactions regardless of industry. US Exim is also under pressure from fossil fuel advocates in the Republican Party to help finance a US$14.9bn LNG project in Mozambique.
