The Export-Import Bank of the United States (US Exim) has approved a US$527mn loan to help US companies develop a gas-to-energy project in Guyana.

The financing, disbursed to Guyana’s Ministry of Finance, will be used to construct a natural gas separation plant and a 300MW gas power plant, and will also fund services related to the gas pipeline supplying the plants.

US Exim says the project will double Guyana’s installed electric capacity and help the South American country transition away from the use of imported fuel oil as a power source, resulting in a reduction of more than 460,000 tonnes of CO2 each year.

The project secured preliminary approval from the bank in late November following a “long” due diligence process, despite ongoing objections from climate campaigners and NGOs over US Exim’s continued funding of oil and gas.

More than a dozen US companies are involved in the project, which includes the creation of a joint venture between Texas-based energy solutions company Lindsayca and Puerto Rican engineering and project management company CH4 Systems, with services provided by ExxonMobil.

The bank declined to provide information on the tenor or rate. A spokesperson tells GTR that “due to business confidentiality, we are unable to comment on ongoing or potential projects”.

The project falls under US Exim’s China and Transformational Exports Program, which exists to support US businesses that are competing against Chinese exporters for overseas contracts. Under the bank’s 2019 reauthorisation, it is required to reserve at least 20% of its total financing for projects that fall under this umbrella. The programme allows US Exim to provide longer tenors and lower rates, potentially matching those the bank expects Chinese export credit providers to offer.

“I am extremely pleased that the board of directors approved this strategically important energy project,” says US Exim president and chair Reta Jo Lewis.

“Not only is Exim continuing its support of US businesses small and large, but this project will support more than one thousand jobs across the country. 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.”

In early December, oil trader JE Energy secured a US$100mn revolving trade finance facility to enable its purchase and sale of crude oil from Guyana, which has rapidly grown production since discovering energy reserves in 2015.