Exim anticipates the project will reduce over 460,000 tons of CO2 annually, equivalent to more than one billion barrels of oil. Credit: Pamela Au/Shutterstock.

The Export-Import Bank of the US (US Exim) has sanctioned a substantial $526m loan to support a gas-to-energy project in Guyana.

This initiative is set to double the South American nation’s installed electric capacity and diminish its reliance on oil imports.

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Exim stated that the project, aimed at supporting exporters facing competition from China, will use natural gas-powered turbines for electricity generation.

The bank has highlighted the environmental benefits, projecting a reduction of over 460,000t of carbon dioxide annually. This is comparable to the consumption of more than one billion barrels of oil.

However, environmental advocates have voiced concerns, arguing that the loan is at odds with the Biden administration’s pledges to support a shift from fossil fuels, as committed to at COP28 in Dubai the previous year.

Exim’s funding appears to conflict with these international agreements, particularly with the $3bn support for fossil fuels since May 2023, as pointed out by Friends of the Earth.

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The loan will bolster a joint venture involving Lindsayca from Texas and CH4 Systems from Puerto Rico, with ExxonMobil providing services.

This collaboration is expected to generate 1,500 jobs across eleven states and territories.

US Exim Bank President and Chair Reta Jo Lewis said: “I am extremely pleased that the Board of Directors approved today’s Gas-to-Energy Project,

“I am especially proud to continue to support Bank priorities and charter mandates along with projects that align with the Administration’s economic, energy, and national security priorities.” 

The venture had to overcome direct competition from Chinese firms to secure the Guyana contract.

The project’s scope includes the construction of a natural gas separation plant, a 300MW combined-cycle gas turbine power plant, and a gas supply pipeline near Georgetown, Guyana’s capital.

Friends of the Earth International Finance deputy director Kate DeAngelis said: “Sneaking in a loan deal for a massive planet polluter seems to check off Big Oil’s Christmas list. Investing in solar energy in Guyana would cost less, reduce costs for ratepayers and generate more local jobs, yet EXIM is intent on pleasing our planet’s biggest polluters and making the Guyana people pay.

“We are disgusted by EXIM’s underhanded manner with this project, and by its blatant disrespect toward Guyanese voices.”