The government of Guyana has applied for a loan valued at GY$134 billion (US 646 million) from The Export–Import Bank of the United States (US EXIM Bank) to fund its multi-billion Gas-to-Energy project.

The proposed loan from the US Bank, if approved, will add to the country’s growing financial debts.

The International Monetary Fund (IMF) in the past week named Guyana among the five countries in the Latin America and Caribbean region as heavily indebted poor countries (HIPC).

Guyana’s Kaietuer News reports that the number of funds requested from the US Bank could significantly affect the country’s financial stability.

President Irfaan Ali signed a Memorandum of Understanding (MOU) last year with the EXIM Bank-US for potential funding of US$2 billion for development projects. The President aims to involve the US government and private sector more in Guyana’s affairs.

Awaiting loan approval

Vice President, Bharrat Jagdeo announced that the application for the loan has been submitted and is progressing towards a conclusion.

He said that “the Minister of Finance [Dr Ashni Singh] has had several engagements with EXIM Bank, and from what he said, it’s making progress toward the conclusion of the loan. So, progress is being made in that regard.”

The fund will go towards the cost of the natural gas-fired power plant and natural gas liquids plant to be constructed by contractor CH4-Lindsayca valued at a cost of US $955.5 million.

The project is set to begin later this year with CH4-Lindsayca handling the natural gas-fired power plant and natural gas liquids plant. The ExxonMobil subsidiary, Esso Exploration and Production Guyana Limited is handling the pipeline, which alone is expected to cost more than US$1 billion.

The Environmental Assessment Board will now have to make a decision on the appeals against the Environmental Protection Agency’s decision not to require a separate environmental impact assessment for the power plant.

Kaietuer News reports that major construction cannot begin until this is settled. The government has to finalize several permitting documents, including the Liza Phase One field development plan.

Jagdeo explained that the Liza project is built with a 20-year lifespan, and insinuated that the government will have to grant an extension to accommodate the Gas-to-Energy project.