Govt injects US$400M into Gas-to-Energy Project to date – VP

…says Guyana could fund entire initiative

Vice President Dr. Bharrat Jagdeo has disclosed that government has already spent some US$400 million on the highly anticipated Gas-to-Energy (GtE) Project and could potentially fund the entire initiative if the US$650 million loan from the United States Export-Import (US EXIM) Bank does not come through.
It was announced in April 2023 that Guyana had applied for the loan from the US EXIM Bank to finance the US$761 million GtE Project, which includes the construction of an Integrated Natural Gas Liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara, utilising natural gas from the country’s offshore operations in the Stabroek Block.
During a press conference on Thursday, VP Jagdeo provided an update on the project.
“Because of the delay of the loan [approval], we have, from our own resources, paid about US$400 million. So, more than half of the project [was paid] from our own resources,” he disclosed.
The Vice President explained that the aim was to borrow approximately US$650 million from the US Bank to fund the GtE initiative. The Guyana Government was expected to put up the other US$100 million, as advanced payment, to support the initiative.
However, with Guyana already injecting more than half of the project cost into advancing the works, Jagdeo said this augurs well for the country.
“That’s even better for us. [With] the loan from EXIM, we can get reimbursed for [the money we spent] because of the way it’s structured. But just to tell you, the project will be done and whereas, even if it means carrying it from our own budget. And the country should even be happy about this; that we managed to carry [the works done so far] from our own budget and still do all the other developments we’re talking about,” he contended.
VP Jagdeo had previously explained that the loan can fund retroactive expenditure hence government could use bridge financing to get the works going. Bridge financing is a short-term financing option in order to fund a project before the financing is expected.
Visit to Washington
Nevertheless, the Vice President noted that Guyanese officials have been in constant engagement with the US Bank and Government remains confident that the loan will be approved.
“[Finance] Minister Ashni Singh will be going to Washington soon and so, he will be meeting with the [bank] executives there,” Jagdeo added.
Back in June of this year, a technical team from the US financial institution was in Guyana and completed technical and environmental assessments.

President Dr. Irfaan Ali had subsequently said that there were no fatal flaws arising from those assessments and that the loan should be approved in the coming months.
With this due diligence completed, President Dr. Irfaan Ali, during a June 20 press conference, said government expects the loan proposal to be submitted to the EXIM Bank’s Board of Directors before the third quarter of 2024.
According to the Head of State, based on feedback from the technical team that was here, there should be no hindrances to the approval of the funding for the GtE Project.
“The technical team has advised that there are no fatal flaws arising from the technical and environmental due diligence,” Ali had noted.
This was in response to a question about local and international lobbying efforts to block the funding for the GtE Project by the US EXIM Bank.
Earlier in June, it was reported that Friends of the Earth United States, an NGO with over 16,000 members, wrote Chairman of the US EXIM Bank, Reta Jo Lewis, demanding the institution does not fund the GtE Project.
But the Guyanese Leader assured that, “We have never found ourselves in any situation where there was any objection that is fatal to any aspect of the project.”
While Guyana awaits funding from the US EXIM Bank, construction works on the project continues with Government expecting the power plant to come on stream in the first half of next year.
In fact, VP Jagdeo had said at a June 6 press conference that Guyana would still pursue the project, with or without the US Bank’s loan, noting that there are alternatives available to ensure that this transformative initiative is completed.
“So, it’s moving forward. We’re not desperate or at a point where we have to stop this project because the loan is not coming through. And we have several alternatives too. We’re not a party or a government that doesn’t have contingencies,” Jagdeo contended.
He added, “So, this project will be built. The Gas-to-Energy Project will be completed. It will deliver 300 megawatts of power; it would produce stable, cheaper electricity for the people of this country; and also, from that project. We’ll start becoming an exporter of cooking gas from an importer now, and we will be able to pay back for this project even from the proceedings of the sale of the liquids. And we are firm in that, and it’s going to happen.”
The Guyana Government has set aside a whopping $80 billion in Budget 2024 to advance the GtE initiative this year and its associated infrastructure, including transmission and distribution upgrades to offtake the power.
Thus far, the marine offloading facility has been completed, and 26 kilometres (km) of onshore pipelines are being installed by US oil major, ExxonMobil.
But even as Exxon has assured of delivering the pipeline by year-end, when it will be sealed until it is ready for use, the construction of the power plant and NGL facility has been delayed by at least six months.
Government had initially envisioned the startup of the GtE Project by this year end. However, the contractor, a US-based consortium – Lindsayca CH4 Guyana Inc. (LNDCH4) – is engaged in a disagreement with the Government over the timelines of the project and associated costs. LNDCH4, which was awarded a US$759 million contract in November 2022 to build the power plant and NGL facility, is making financial claims to the tune of US$50 million over delays from other components of the project which were overseen by Exxon, saying that the late handover would affect its delivery according to contractual timelines.
In light of the delays, the Government has extended the deadline, but the contractor is not satisfied, and wants more time. Moreover, the Guyana Government has rejected the claim, resulting in the contractor moving to a dispute resolution mechanism that would see a three-member board set up to mediate between the two parties.
Government has already assured that this dispute is not affecting construction works, which continues uninterrupted. (G8)