Govt, US-Exim Bank sign US$527 million for GTE project

Jan 11, 2025 News

---

Kaieteur News- The Government of Guyana on Friday signed a US$527 million loan agreement with the United States Export-Import (US EXIM) Bank, for the Gas-to-Energy (GTE) project. The signing ceremony was held at the Wales, West Bank Demerara project site.

The loan will support the construction of a Natural Gas Liquids (NGL) facility and a 300-megawatt power plant. Gas will be transported from the offshore Stabroek Block Liza oilfield via a 12-inch pipeline to the project site, where 50 million cubic feet of gas will be converted into power daily. The project is expected to cut electricity costs nationwide by 50%.

Government had hired a joint venture CH4-Lindsayca back in 2022. Lindsayca, a Texas-based and Puerto Rican company, CH4. The joint venture was hired to construct the power plant and NGL facility for US$759 million. Construction is expected to be completed this year.

In her address, US EXIM Bank President and Chair, Reta Jo Lewis, described the project as transformative, and beneficial. “As you know, last week, the Board of U.S. Export Import Bank of the United States voted unanimously to approve over a half billion in US dollars of financing for this transformative gas-to-energy project,” Lewis said.

“This deal is a gamechanger. Not just for Guyana and the United States, but for the people, businesses, and shared aspirations that unite our two nations. Together, we are taking bold steps to strengthen energy security, enhance environmental sustainability, and unlock economic opportunity,” she added.

Further, Senior Minister with responsibility for Finance, Dr. Ashni Singh, underscored the importance of the GTE project for Guyana’s development.

“I will therefore, very simply reiterate, personally how important this project is. As Chair, Lewis has already said, this single project is going to see Guyana doubling, more than doubling our electricity generating capacity and importantly, you’ll see us advance in our journey towards cleaner and more renewable sources of energy, given the gas to be a transition fuel,” Dr. Singh said.

Minister Singh highlighted the broader economic impact. He stated, “In addition to that, [the project] will see us improving the reliability of our energy supply and reducing the cost of our energy supply to the extent that we will be able to reduce the cost of electricity to the consumer by 50%. This will, in turn, catalyze a quantum leap in the competitiveness and potential competitiveness of the entire non-oil economy.”

Similarly, Prime Minister Brigadier (Ret’d), Mark Phillips referred to the GTE project as the largest and most transformative initiative in Guyana’s history.  He also spoke about how the project will benefit citizens.

The Prime Minister said, “This project will empower our people, our industries, and our aspirations as a nation. Today, we are speaking of a clean, more reliable, and more affordable energy future. Families will find relief in lower electricity costs. Businesses will discover new avenues for growth. Our industries will expand, bringing with them jobs, opportunities, and prosperity.”

Repayment

Recently, Vice President (VP) Bharrat Jagdeo during his weekly press conference at Freedom House, Georgetown explained that there is a fixed 4% annual interest rate on the loan which would be repaid over a period of 15 years.

He said the country will be required to make two annual payments on November 1 and May 1, commencing on May 1, 2031.

“The interest rate is 4% so if you calculate it over the period, but remember there are moratoriums and all of that so it’s a 4% interest and you can calculate what the repayment would be over a time period. It’s fixed at 4%…principal repayment is 30 semi-annual installments…so it’s 15 years thereafter,” the VP explained.

Background on loan

Back in April 2023, it was revealed that Guyana applied to the Bank for a US$646M loan to support the NGL and power plant.

On November 28, 2024, Vice President Bharrat Jagdeo announced that approval had been granted for the loan.

At that time, Jagdeo explained that the loan will be providing retroactive financing, so if it is made available, it will be covering financing that the government had to make since the start of the project.

Last month, Prime Minister Phillips indicated that some $99B has been spent to date on the GTE project. His revelation came as Parliament approved an additional $25.3B to further advance the project. As of November, 58% of the work had been completed, according to the Prime Minister.

(Govt. inks US$527M loan with US-Exim Bank for GTE project)

---

• Government of Guyana, natural gas liquids, United States Export-Import, US EXIM Bank President and Chair

---