Guyana’s flagship Gas-to-Energy project is entering what could be its most consequential phase, with the Government still promising first power before the end of the year while fresh reports suggest the contractor is running short of money and seeking a substantial increase in funding.
The development raises questions not only about whether the long-delayed project will meet its latest December target, but also about the eventual cost to taxpayers and whether the Government’s promised 50 percent reduction in electricity prices can still be achieved.
Lindsayca Guyana Inc., which is constructing the 300-megawatt power plant and Natural Gas Liquids (NGL) facility at Wales, was awarded the project for approximately US$759 million.
Kaieteur News reported on September 6 that Lindsayca is expected to exhaust its available financing by the end of September and has sought approximately US$170 million in additional funding from the Government. The newspaper said company documents support the reported request.
The reported request would amount to roughly 22 percent of the original contract value.
Government disputes existence of formal request
The Government, however, has not confirmed that Lindsayca has formally requested the additional US$170 million.
Prime Minister Mark Phillips, who has responsibility for the energy sector and the Gas-to-Energy project, said this week that he was unaware of any formal request from the contractor.
Phillips said that if such a request is submitted and approved, the Government would make the decision public.
That leaves a crucial question unanswered: Is the reported US$170 million merely a contractor proposal under discussion, or is Guyana facing another major financial commitment to keep the project moving?
The distinction matters because the Government had already acknowledged a significant increase in the project’s cost.
From US$759 million to potentially much more
In May, the Government said it had reached an agreement with Lindsayca over disputes concerning soil stabilisation at the Wales site and delays.
The settlement resulted in a 12.8 percent increase over the original contract, while the Government maintained that its overall project cost would remain below approximately US$1.1 billion, including a 10 percent contingency.
The latest reported US$170 million request would put further pressure on that ceiling if ultimately accepted.
The controversy is compounded by questions surrounding the earlier US$97 million settlement. Kaieteur News has reported that Lindsayca’s original 2022 proposal itself included approximately US$102.6 million for soil stabilisation, landfill and drainage works, challenging the Government’s characterization of the work as unforeseen. Those claims have not been independently established by the Government.
The issue is therefore no longer simply whether Guyana can afford Gas-to-Energy.
It is whether cost and contractual risks are being transferred increasingly from the contractor to the state.
First power still targeted for December
Despite the financial controversy, the Government is pressing ahead with the project.
Following a September 8 inspection, Public Utilities Minister Deodat Indar said the first turbine is being prepared for initial firing and testing in December, with the first unit expected to provide approximately 57 MW to the national grid.
The Government says the complete Phase One facility will eventually deliver 300 MW, with the remaining gas turbines expected to be commissioned during the first quarter of 2027 and combined-cycle operations completed by June 2027.
The project has already suffered substantial delays from earlier deadlines, making the December target another important credibility test.
The financing problem cannot be separated from the economics
The Government’s central justification for the massive investment is that Gas-to-Energy will cut electricity costs by 50 percent, reduce fuel imports and improve reliability.
But every additional dollar required to complete the project potentially weakens that economic proposition.
Guyana is financing an expensive chain of infrastructure: the gas pipeline, processing facilities, power plant, transmission infrastructure and supporting grid upgrades. The country must then pay for gas, operate and maintain the plant and service project-related financing.
If the capital cost continues rising, the Government will have to demonstrate that the resulting electricity savings are sufficiently large to compensate.
That is particularly important because Gas-to-Energy is being developed alongside a massive expansion of Guyana’s electricity network. GPL says it is investing approximately US$800 million in transmission and distribution infrastructure, while recent outages have highlighted weaknesses in the existing grid.
Running out of money changes the question
The most troubling element of the latest controversy is not necessarily the US$170 million figure itself.
It is the possibility that a contractor responsible for a project of national strategic importance could reach the point where it cannot finance completion under the existing arrangement.
If that is confirmed, Guyana would have to decide whether to inject more public money, renegotiate the contract, restructure payments or risk further delays.
None of those options is cost-free.
Guyana has substantial oil revenues and financial resources, but that should not be confused with unlimited fiscal capacity. Every additional dollar directed into Gas-to-Energy is a dollar that cannot simultaneously be deployed elsewhere or saved for the post-oil economy.
The ultimate test, therefore, is becoming increasingly clear:
Can Guyana finish Gas-to-Energy without turning a US$759-million contract into a substantially more expensive obligation—and can the completed project actually deliver the 50 percent reduction in electricity costs promised to the public?
Until those questions are answered with audited numbers, the December first-power target may demonstrate construction progress, but it will not by itself prove that Gas-to-Energy has been a financially successful investment.
