Gas-to-Energy project gets initial approval for US$500M loan from US EXIM Bank- US Official

Dec 18, 2024 News

Kaieteur News- The United States Export Import (US-EXIM) bank has given an “initial approval” of US$500M to support the Government of Guyana’s Gas-to-Energy (GTE) project.

This was revealed on Monday by Assistant Secretary of State for the Western Hemisphere, Brian Nichols during a Press Briefing in New York.

He told the foreign press that the U.S. has focused on harnessing its diplomatic tools to build partnerships to deliver results that advance “American core interests”, and the core interests of its partners and allies around the hemisphere. This, the Assistant Secretary of State for the Western Hemisphere noted “has elevated our relationship with emerging powers like Guyana.”

Gas-to-Energy project gets initial approval for US$500M loan from US EXIM Bank- US Official

Assistant Secretary of State for the Western Hemisphere, Brian Nichols.

Nichols said, “The strategic elevation of our relationship with Guyana, the fastest growing economy in the world, provides further proof that these partnerships produce results. Our interagency partners at U.S Southern Command strengthened bilateral defence corporation through medical missions, flood relief operations, joint training exercises and military equipment transfers.”

He added, “We also partner with US companies, which invested more than US$15B in Guyana between 2021 and 2023. In November, the US Export Import Bank gave initial approval for a US$500M loan guarantee to support a US$2B, U.S-built Gas-to-Energy project that represents the largest foreign investment in Guyana’s history.”

Vice President Bharrat Jagdeo at his November 28, 2024 press conference at Freedom House first made the announcement that the loan was approved.

Former Minister of Public Infrastructure, David Patterson later disputed the news, insisting that a credible source had informed him otherwise.

Meanwhile, Former Finance Minister, Winston Jordan, in an attempt to clarify the current status of Guyana’s loan application to the financial institution recently explained that while initial approval had been granted, the Board of the US EXIM Bank will make the final decision.

On the other hand, he said that while Jagdeo has repeatedly indicated that the loan would provide retroactive financing for the Wales project, the VP has not explained the limitations of this. As such, he pointed out, “Assuming that EXIM Bank does indeed (provide) retroactive financing, there are clear issues involved…one is that for you to get retroactive financing you have to follow the identical rules of the EXIM Bank. You can’t follow your rules, you have to follow the procurement rules of the EXIM Bank.”

Additionally, he explained that all the expenditure must comply with the Bank’s requirements for eligibility. “You have to keep a proper record of all the steps and so on and each stage of the way, you have to have approval by the EXIM Bank Procurement Committee that it is consistent with their rules and so on,” Jordan noted.

Moreover, he pointed out that there is a limit to the retroactive financing that will be provided by the institution.

The former Finance Minister explained, “The whole loan can’t go to retroactive financing, there is a limit to what retroactive financing you can get, so all of these things have not been made clear to the public but you get the impression that once they get this loan it can be applied retroactively to monies that we have already spent.”

Last month, Prime Minister Mark Phillips informed the National Assembly that $99B has spent to date on the project by the government, with 58% of the works already completed. Another $25.3B was approved for the project in Parliament in November.

(Gas-to-Energy project gets initial approval for US$500M loan from US EXIM Bank- US Official)

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Approval, gas, GTE, loan, US-EXIM bank

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