Could Biden’s freeze on LNG affect Guyana’s US$660M loan request from the US?

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Shikema Dey
Experienced Journalist with a demonstrated history of working in the media production industry and a keen interest in oil and gas, energy, public infrastructure, agriculture, social issues, development and the environment.

President Joe Biden hit pause on LNG project approvals in the U.S., under pressure from climate activists. Talk of widening that net globally has emerged, to include projects seeking U.S. support.

A Jan. 26 article by The New York Times said activists see a contradiction between what Biden is doing in the U.S. versus around the world.

Reference was made to two mega projects: TotalEnergies and ExxonMobil’s Papua New Guinea LNG project and Guyana’s Gas-to-Energy project. Financing for both is being sought from the U.S. EXIM Bank – US$13 billion and US$660 million respectively. 

Friends of the Earth – a network of environmental organizations – has launched calls for the Papua New Guinea project not to be supported, the article outlined. 

“He’s done so much at home,” Kate DeAngelis, who works on international finance at Friends of the Earth said. “But he cannot claim to be a climate champion when the U.S. is propping up this fossil fuel infrastructure all over the world.” 

Papua LNG is said to be among the five gas and mining projects that are planned to expand the country’s economy to 200 billion kinas (US$55 billion) by 2029. On the other hand, Guyana’s Gas-to-Energy project is expected to slash power costs by half and provide reliable electricity to a country plagued by frequent blackouts. The proposed loan is intended to aid the US$759 million expenditure required to set up an integrated facility at the Wales Development Zone, situated on the West Bank of Demerara. This facility encompasses a 300-megawatt (MW) natural gas power plant and a natural gas liquids (NGL) plant. Additionally, the loan will boost the establishment and enhancement of electrical transmission infrastructure. 

The government spoke about applying for the loan back in 2022. Guyana’s Vice President, Bharrat Jagdeo is positive that it will be approved. Until this time, he hinted at the use of bridge financing to ensure the project gets off without a hitch. 

A senior U.S. EXIM official told The Times that while the bank “seeks to align with the administration’s climate agenda,” it still needed to comply with statutory requirements, including a “prohibition against discrimination based solely on industry, sector or business.” The bank’s ultimate mission, the official added, was “to support U.S. jobs.”

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