US EXIM Bank Chief to talk up approval of US$527M for Gas-to-Energy project

…during 4-day visit to Georgetown

Some two weeks after the Export-Import (EXIM) Bank of the United States approved the US$527 million loan for Guyana’s Gas-to-Energy project, the bank’s President and Chair, Reta Jo Lewis, will be in Georgetown to talk about the historic half-billion-dollar energy deal.
In a brief statement on Wednesday, the US Embassy in Georgetown disclosed that Jo Lewis will be in Georgetown on a four-day visit “…to highlight the EXIM Board of Directors’ recent approval of $527 million in financing to support a gas-to-energy project that will double the country’s installed electric capacity.”
The US EXIM Bank Chief is expected to arrive today. During her visit, she would be meeting with President Dr Irfaan Ali, senior Guyanese officials, and business leaders to discuss the GtE project and future opportunities for the U.S. and Guyanese companies to partner on in order to benefit both peoples.
“The [GtE[ project will help Guyana transition to more reliable and cleaner energy for consumers and businesses, while supporting 1,500 American jobs. It will also unlock economic growth potential for U.S. and Guyanese companies of all sizes,” the US Embassy stated in its missive.
Back in April 2023, Guyana had applied for a 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.
On December 26, it was announced that US EXIM Bank’s Board of Directors approved $527 million to Guyana’s Finance Ministry to support the highly anticipated Gas-to-Energy project that would strengthen the country’s energy security by doubling its installed electric capacity.
According to the bank, the financing from the loan transaction would aid the construction of a natural gas separation plant, a 300 MW combined cycle gas turbine power plant, and services related to the gas supply pipeline near Georgetown.
“This project will allow Guyana to transition to more reliable and cleaner energy for consumers and businesses by using natural gas-powered turbines to generate electricity. Without this gas-to-energy project, Guyana will continue to import fuel oil, one of the highest polluting fossil fuels, and be unable to decommission hundreds of less efficient local generators. This project will result in a reduction of more than 460,000 tonnes of carbon dioxide per year, the equivalent of consuming more than one million barrels of oil,” the bank stated.
In that missive, Chair Lewis said she is pleased with the Board’s approval of this strategically important energy project, adding, “Not only is EXIM continuing its support of US businesses small and large, but this project will support more than one thousand jobs across the country. I am especially proud to continue to support Bank priorities and charter mandates along with projects that align with the administration’s economic, energy, and national security priorities.”
The loan financing will support the US joint venture – Lindsayca CH4 Guyana Inc. (LNDCH4) – involving Lindsayca, a Texas-based company, and CH4 Systems, a Puerto Rican small business, as well as services provided by ExxonMobil, which has already installed the US$1 billion pipeline that will bring the gas onshore to the Wales site.
Last week, Vice President Dr Bharrat Jagdeo told reporters that the approval of the US$527 million loan was not conditional on the settlement of claims being made by LNDCH4 Guyana.
The Guyana Government and the US-based consortium of Lindsayca and CH4 are at loggerheads over a US$50 million claim by the contractor and the timeline for the completion of the project.
LNDCH4 was awarded the US$759 million contract in November 2022 to build the 300-megawatt Combined Cycle Power Plant and a Natural Gas Liquids (NGL) facility at Wales. However, there was a three-month delay in other components of the project that would affect LNDCH4-Guyana’s delivery of the power plant in accordance with the contractual timelines. While the Government has extended the deadline by three months, the contractor is not satisfied, and wants more time.
In addition, LNDCH4 is making financial claims to the tune of US$50 million, stating that the delays would cost the company. The Guyana Government has already rejected this financial claim, thus resulting in the contractor activating the dispute resolution mechanism.
A three-member Dispute Avoidance/Adjudication Board (DAAB) that was set up to resolve this issue has already heard oral and written submissions from both sides, and could potentially rule by this month, Jagdeo had previously reported. He had noted, too, that if either or both parties are not satisfied with that decision, then the matter would head to full arbitration.
But even as efforts are being taken to resolve this dispute, the Guyana Government has maintained that this issue would not impact the project, and that works continue on the ground.