THE United States Export-Import Bank has granted preliminary approval for a loan requested by the Government of Guyana to support the country’s gas-to-energy project. Guyana’s Vice President, Dr Bharrat Jagdeo, stated that the approved amount exceeds US$500 million and will cover the cost of materials exported from the United States to Guyana for the project.

This preliminary approval is a significant achievement for Guyana, which had waited over a year for the bank to review its application. The application will now be submitted to the United States Congress and is currently in a 30-day notification period, after which it will return to the bank’s board for final approval.

This development is essential because it indicates that the bank believes the gas-to-energy project is viable and capable of achieving its goal of providing low emissions, natural gas-fired power to the people of Guyana. It is expected to lower electricity rates for consumers and reduce emissions related to power generation.

The lengthy approval process suggests that the bank carefully considered the decision to grant preliminary authorisation, which employs rigorous procedures to vet applications, including an extensive environmental review process. In this case, the bank evaluated multiple documents, including the project’s environmental impact assessment, to assess the project’s potential environmental impacts. Additionally, the bank allowed public feedback regarding environmental concerns associated with the gas-to-energy project.

The government of Guyana has already allocated significant funds for the project’s development phase. While awaiting loan approval, the government began disbursing substantial amounts from the treasury in 2022 to facilitate contractors’ works.

Public documents indicate that parliamentary approval has been granted for over US$800 million to support the main development of the project onshore located at Wales, as well as other initiatives such as consultancies and transmission infrastructural upgrades.

The government has expressed strong confidence in the project, which is why it chose to invest public funds while waiting for assistance from the bank. Therefore, when the bank’s loan is finalised, it will retroactively finance the project by reimbursing some of the funds previously disbursed by the government.

ExxonMobil Guyana, responsible for building the pipeline, has completed its mechanical installation. Exxon is now awaiting the completion of the 300-megawatt power plant and the NGL separation plant being built at Wales. It is anticipated that all necessary infrastructure will be in place later in 2025, allowing Exxon to transport the first gas from offshore for power generation. This will enable Guyanese people to benefit from cheaper, more environmentally friendly power, helping to stabilise electricity delivery in the country.

The gas-to-energy project is expected to have a revolutionary impact on the manufacturing sector. The historically high cost and instability of electricity have deterred investments in Guyana. Once the project is operational, it will address many of these issues, making Guyana a far more attractive investment destination. The government plans to keep the heavy fuel oil power plants as reserves as it shifts to gas-fired power. This transition will help cut costs associated with expensive heavy fuel-oil imports. Since the natural gas will be sourced from Guyana itself, the country will achieve energy independence.