The US government this week moved to bolster its influence with one of the world’s fastest emerging oil producing nations, as EXIM Bank, its export and import facilitation agency signed off on a memorandum of understanding worth $2 billion that will help mostly American firms to cash in on large business opportunities in Guyana.
The deal was signed on Wednesday during an official visit of Guyanese President, Irfaan Ali and bank officials in Washington as the Biden administration signaled its interest in ensuring American businesses benefit from the numerous from Guyana’s rapidly growing oil and gas sector which has provided bountiful investment opportunities for large infrastructural and other projects.
The signing comes amid concerns in Washington that Chinese firms had been raking in the bulk of large state contracts with the help of concessional financing from China but the agreement paves the way for mostly American and Guyanese firms to “explore options for utilizing EXIM’s financing which includes direct loans, guarantees and insurance products to finance the sale of US exports to Guyana for government projects,” a joint statement said.
Guyana has in recent years been lobbying China and Chinese companies to finance major roads and other projects here, triggering concerns in diplomatic circles about China’s growing influence in Guyana and the Caribbean at the expense of the west. Approaches have also been made to the Islamic Bank and individual countries like Saudi Arabia for development finance but it is unclear how many local businesses and government projects will in fact qualify for loans from the bank.
For his part, President Ali said after the signing that the bank is appearing on the Guyanese horizon at an important time in local history and development. “One of the inhibitive factors has always been the ease of access to financing and the barriers to financing. This MOU is the single most important signature not only for Guyana but for the region. The US, through EXIM, is serious about its commitment to the CARICOM region.”
Possible areas for financing include infrastructure such as roads, hotels, renewable energy endeavors, wireless communication and agriculture. Guyana and its CARICOM neighbors have been expressing increasing worry about the region’s $5 billion import food bill. Guyana hosted a special agricultural summit attended by at least seven heads of government in May that had pushed for the establishment of mega farms in Guyana, Suriname and Belize-the larger member states-and efforts to grow crops and raise animals in the region rather than buy from abroad.
“The EXIM bank is the official export credit agency of the United States. Our mission is to support American job creation, prosperity and security through exporting. We accomplish this by unlocking financing solutions for U.S. companies competing around the globe. We help level the playing field and fill gaps in private sector financing,” the bank’s mission statement noted.
