Latest update May 31st, 2023 3:04 PM
May 17, 2023 News
…gives seven reasons including lack of feasibility study, alternative power study
Kaieteur News – Attorney-at-law and civil society activist, Elizabeth Deane-Hughes has flagged seven discrepancies in the Wales Gas-to-Energy (GTE) project and has written the US Exim Bank requesting that a loan being sought by the Government of Guyana (GoG) to fund the initiative be blocked.
Her points were raised with the President and Chairman of the Board of Directors, United States Export Import (US-EXIM) Bank, Reta Jo Lewis, in a letter, dated April 22, 2023. According to the missive seen by this newspaper, that was also brought to the attention of US Ambassador, Sarah Ann-Lynch, Deane-Hughes objected to the loan application by the GoG, specifically to finance the 300-megawatt power plant and Natural Gas Liquids (NGL) facility.
These are two components of the project, the third aspect being a pipeline to transport the natural gas to shore from the Liza One and Two Fields in the Stabroek Block. The pipeline is being funded by American oil major, ExxonMobil and would be repaid by Guyana through the sale of the gas.
On April 16, this newspaper reported that Vice President Bharrat Jagdeo announced the official loan application to the Bank. He said, “The Minister of Finance [Dr. Ashni Singh] has had several engagements with EXIM Bank, and we from what he said, it’s making progress toward the conclusion of the loan. So, progress is being made in that regard.” Budget documents indicate the government is seeking GY$134 billion (US$646 million) for the project, raising further concerns about the country’s debt record.
The activist in her objection to the loan application pointed out that to date no financial and/or any feasibility study for this project, which involves approximately 25km of on-shore pipeline, has been cited by the people of Guyana, despite repeated requests for the same.
Further, she advised that a civil court case numbered 456/2023-FDA has been filed in the judicial system, challenging the Environmental Permit (EP) issued to Exxon for the pipeline aspect of the project, on the basis of lack of adherence to the rule of law as is stated in the Environmental Protection Act and its guiding regulations.
It was also noted that, “The Environmental Assessment Board (EAB) which is an instrument formed under the aforementioned Environmental Protection Act to hear appeals against the Environmental Protection Agency’s (EPA) decisions and/or actions is not duly constituted, as there are conflict of interest matters with the newly appointed Chairman. The appointment was made during February 2023. Consideration is being given to file a civil court action against the EAB for failure to adhere to the rule of law contained in the Environmental Protection Act for the appointment of members to the EAB.”
Deane-Hughes explained at that time, the EAB was yet to make a decision on appeals heard in March, against a waiver of an environmental impact assessment (EIA) for the power plant, by the EPA. It must be noted that the EAB has since ruled this study will not be required for the project. Citing other reasons for her objection to the loan, the activist said to date there is no secured Right of Way (RoW) for the proposed pipeline.
Moreover, she argued that there is still no publicly announced final investment decision (FID) by the Permit holder with responsibility to construct the pipeline. She also pointed out that to date, there is/are no publicly available alternative study/studies for electricity generation available for public perusal.
On December 13, 2022, the Government of Guyana signed a US$759M contract with CH4-Lindsayca to construct the power plant and NGL facility at Wales, West Bank Demerara (WBD). Head of the GTE Taskforce, Winston Brassington, during the International Energy Conference in February this year outlined that some US$477 million is allocated to the power plant, while the NGL facility is budgeted at US$282 million.
He has indicated that Guyana will be expected to pay US$51 million annually for 20 years on a loan the country will take to pay for the two components of the project. Additionally, the country will be required to pay US$55 million for 20 years on the pipeline, “at a discount rate” according to him.
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