Georgetown Chamber writes US EXIM Bank in support of Gas-to-Energy project

Amid delay in a key loan being finalized, the Georgetown Chamber of Commerce and Industry (GCCI) has written to the United States EXIM Bank expressing support for the bank’s financing of the huge gas-to-shore project.

In so doing GCCI is dismissing concerns raised by civil society members here that the bank should not fund the project, while positing that the aim of the signatories of the those letters is to stymie progress here.

“Consequently, the GCCI wishes to express our deep concern and strong condemnation of certain attempts by a small minority of individuals to discredit the project and discourage the EXIM Bank from providing financial support for this landmark project,” a letter from the GCCI to President of the US EXIM Bank Reta Jo Lewis, stated.

The letter was copied to Speaker of the United States House of Representatives, Mike Johnson; Assistant Secretary of State for Western Hemisphere Affairs, Brian Nichols; President Irfaan Ali; Vice President Bharrat Jagdeo; Leader of the Opposition, Aubrey C. Norton; and Minister of Foreign Affairs and International Cooperation, Hugh Todd.

“The GCCI is especially disheartened to see the vilification of a project that holds significant potential benefits for our nation and its citizens, we are appalled at missives penned requesting that the loan to fund the initiative be blocked. Though the GCCI respects the importance of public discourse and right to differing opinions, it is essential to acknowledge that the comments and actions by these dissenting voices do not reflect the interests of the business community in Guyana which has stated in multiple public forums that we will support any project that helps to lower the cost of electricity,” the letter added.

Making a case for the GTE (Gas-to-Energy) project, the GCCI said that the project will “contribute significantly to Guyana’s energy transition, reduce reliance on fossil fuels, and promote sustainable practices.”

“This project is anticipated to reduce electricity costs by approximately 50 per cent – a material change in the cost of electricity for Guyanese citizens and enterprises alike. The GCCI sees this project as having immense potential to drive economic growth, enhance energy security, and promote sustainable development in the Western Hemisphere,” the GCCI noted.

As the US EXIM Bank considers a US$660 million loan for the GTE project, public-interest litigants, Elizabeth Deane-Hughes and Vanda Radzik have instructed their attorney-at-law Melinda Janki, to write to the institution pointing out that the bank should not provide funding for any project which is based on a decision (the grant of a permit) that is “contrary to law.”

The letter which was sent to a number of EXIM Bank staff on Friday January 12, and to the President of EXIM bank, Lewis, states in part, “Eximbank should not provide funding for any project which is based on a decision (the grant of a permit) that is ‘contrary to law’. Eximbank should respect the rule of law in Guyana.”

The letter referenced the case of Radzik and DeaneHughes v Environmental Protection Agency (EPA) and Esso Exploration and Production Guyana Ltd. (Esso) which challenged the EPA’s grant of an environmental permit to Esso for the gas-to-shore project. “We argued that Esso had not submitted the information, required under the regulations, to show that Esso had legal right or authority to do the project without the consent of the landowner or occupier.”

The letter further pointed out, “After examining the evidence put forward by Esso, the court stated that, “It therefore cannot be said, that at the time of grant of the permit on 25th November 2022, that Esso Guyana had submitted all the relevant documents which could potentially evince a legal right or ability to conduct the proposed project without the consent of the landowner or occupier.”

Priority

As such, Deane-Hughes observed that “The rule of law ought to take priority over government plans for this gas project and EXIM Bank ought not to support anything that is contrary to law. All companies & partnerships operating in Guyana, including Stabroek Block Partners, need to adhere to & follow the laws of our country. Moreso, in debut unprecedented transformational & transformative projects.”

The GCCI’s letter yesterday did not name Radzik or Deane-Hughes, but in their correspondence to the bank, stated that the 135-year-old private sector body objects to persons trying to stymie progress.

The Chamber assured that it “remains a continued partner for national development and stands ready to continue its support of the development agenda of Guyana, as it has for the past 135 years.”

In the face of a delay to the US$660 million loan application, made in April of last year, to finance the Wales gas-to-energy project, coupled with the US’ recent pausing on new approvals of LNG exports which activists hope would extend globally, government has said that Guyana had no plans for immediate exports as the current project was domestic based. It is why they believe strongly that the loan here would be approved also.

And even if it doesn’t get the financing, the Irfaan Ali government assured that it has made alternative plans to get the monies which will be either from local revenues or another loan. “I don’t want to speculate about the EXIM Bank funding because we anticipate that the funding will be available, and as I have said before, it would be retroactive funding. However, without disclosing the sources that we have, we have already been talking about a contingent line of credit that could easily supplant that,” Vice President Bharrat Jagdeo last week said.

“Secondly, from the Budget. We have already been financing, beyond the first US$100 million that we have put into the project, from budgetary sources. So that is the first year. We have been making payments to the company from the budget. So those are the two sources – [our] own revenue from the Budget and from a contingent line of credit that we are already discussing,” he added.

And with delays in the loan approval, in late December, Jagdeo had explained it was because of US legislative policies but that he knows that US agencies were backing the project.

“Every US agency, including on a bipartisan basis, members from both sides of Congress assured us that this project is a great project; it will receive their full support, so it is just that you have to go through the technical process,” he had said when this newspaper enquired about the loan’s approval. He was quick to make clear that a timeframe could not be given for the release of the funds as the process requires all the necessary technical and other approvals before the sums are handed over.