Int’l Lawyer writes US EXIM Bank to block funding for Wales gas project

Kaieteur News – International Lawyer, Melinda Janki has written to the United States Export Import (US-EXIM) Bank urging the financial institution to “respect the rule of law in Guyana” and withhold funding for the gas plants to be built at Wales, West Bank Demerara.

International Attorney-at-Law, Melinda Janki

Janki on behalf of public interest litigants Elizabeth Deane-Hughes and Vanda Radzik wrote to the Bank on January 12, 2024. In the letter addressed to President and Chair of the Board of Directors, Reta Jo Lewis, the Lawyer pointed out that Guyana’s High Court on October 5, 2023 concluded that “…the decision by the EPA to grant the permit to Esso Guyana was contrary to law and was improper.”

Consequently, Janki said, “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.”

In a press statement, the two citizens that successfully challenged the permit granted to ExxonMobil Guyana Limited (EMGL) for the 12-inch pipeline said that the rule of law must trump government’s plan. According to Ms Deane-Hughes, “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 and partnerships operating in Guyana, including Stabroek Block Partners, need to adhere to and follow the laws of our country, more so in debut unprecedented transformational and transformative projects”.

Meanwhile, Ms Radzik pointed out that, “The report released on 4^th October 2023 by the independent global think tank, Institute for Energy Economics and Financial concluded that the Guyana Gas to Energy Project is unnecessary and financially unsustainable. The decision to do the gas project appears to be completely irrational and unjustifiable. If that is the case, then the entire decision to do the gas project is unlawful.”

The citizens believe that Exxon is the key beneficiary of the Gas-to-Energy (GTE) project and solar is the cheaper and best option for Guyana in terms of reducing electricity bills, generating jobs and pushing Guyana towards achieving its climate goals of 100 percent renewable energy.

The GTE project entails three components; the pipeline being built and financed by ExxonMobil and the Natural Gas Liquids (NGL) facility and 300-megawatt power plant being pursued by the Government of Guyana (GoG).

In April last year, the government applied to the US-EXIM Bank for a US$646 million loan to support the gas plants. The loan is intended to support the US$759 million cost of the natural gas-fired power plant and natural gas liquids plant to be constructed by contractor CH4-Lindsayca.

The loan has not yet been approved but Vice President Bharrat Jagdeo has said that tax payers’ are funding the project in the meantime.

According to Janki, US-EXIM Bank should not provide funding for the gas plant since the Court clearly stated that the environmental permit granted for the pipeline, being constructed by Exxon, was “improper” and “contrary to law”.

She said, “Without the pipeline there is no project and if the pipeline part of the gas project is unlawful, EXIM bank should not provide money for the rest of the gas project. In my view the exemption for the gas fired power plant from an EIA (Environmental Impact Assessment) is also illegal. I have written to the EPA and told them.”

It must be note that this is the second letter that has been issued to the US-EXIM Bank regarding the loan pending approval. Deane-Hughes in a letter dated April 22, 2023 to the US-EXIM Bank flagged a number of discrepancies in the project, requesting that the loan being sought by the government to fund the initiative be blocked.

Her points were raised with the President and Chairman of the Board of Directors of the institution, Reta Jo Lewis. According to the missive seen by this newspaper, that was also brought to the attention of US Ambassador, Sarah Ann-Lynch, Deane-Hughes objected to the loan application by the GoG given the lack of a feasibility study.

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