The government has invested $520 million in gas-to-power projects since 2022

The government has invested $520 million in gas-fired power projects since 2022

August 19, 2024
information

…citizens, parliament yet to see key documents on country’s most expensive investment

Kaieteur News – Since 2022, the Government of Guyana (GoG) has invested up to $520 million in the controversial Wales gas-to-power project.

Natural Resources Minister Vickram Bharrat

This information is provided by the Department of Natural Resources in response to the following requests: Kaieteur NewsAccording to the ministry, the government spent $24,813 million in 2022, followed by $43,300 million in 2023. This year, the government allocated a further $40 billion in local funds in the national budget for the project. This means that to date, the National Treasury has budgeted a total of $108,113,000,000 or $520 million (using the Bank of Guyana’s exchange rate of 208) for the project.

The Government of Guyana has applied to the United States Export-Import Bank (US-EXIM) for $646 million loan Support for the construction of a natural gas to liquefied petroleum gas (NGL) plant and a 300 MW gas-fired power plant, but financing has yet to be approved.

Vice President Bharrat Jagdeo made it clear The project will not be delayed due to lack of funds from Bank of America. He explained last October, “We can provide bridge financing if needed until (the loan) is in place, and from what I understand, the loan can fund retroactive expenditures, so if you have bridge financing, then once the loan is in place, you can easily go back and pay off the loan.”

Meanwhile, Natural Resources Minister Vickram Bharrat said at a mid-year news conference last week that the project is moving forward, noting, “The application that we submitted to the Export-Import Bank of the United States, I think we have met almost all the necessary requirements, and I think they will discuss us at their next quarterly meeting this month or next month, so we are hopeful that, by all indications, the project will be successful.”

While the loan application is pending, the state will have to pay for the pipeline and power transmission and distribution costs, in addition to the two government-financed plants, for land acquisition.

ExxonMobil, operator of the Stabroek block, is financing the pipeline portion of the project, estimated at $1 billion. Despite its potential to provide a cleaner, more reliable source of electricity for the country, the project has been criticized for its high cost and the fact that it is not backed by a feasibility study.

The government has also been reluctant to publish the agreement signed with ExxonMobil for the project. Since 2022, the government has reportedly signed a framework agreement (HOA) with Stabroek Co-ventures, ExxonMobil, Hess and CNOOC, outlining the principles and conditions of the commercial and technical arrangements of the deal.

The opposition in Congress has made several unsuccessful attempts to obtain the agreements and key documents for the country’s largest infrastructure project. In December 2022, Minister Bharat told Parliament that the agreements could not be made public yet. He explained at the time: “Other agreements are also being drafted regarding supply, buyer agreements, field development, licensing conditions, onshore works and land matters. The relevant agreements and policy documents will be submitted to the House once they are agreed and executed. All agreements are being completed in time to meet the final investment decision, which will enable the project to be completed by our committed December 2024 deadline.”

Yet, nearly two years after that promise was made, the public remains Waiting for these protocols to be released.

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