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.

Any other information on the current or potential project related to the term and rate of financing cannot be disclosed due to confidentiality.