(Ex-Im bank corrects the amount of equivalent barrels of oil

consumed from 1 billion to 1 million in paragraph 3)

By Kemol King and Valerie Volcovici

GEORGETOWN, Guyana/WASHINGTON, Dec 26 (Reuters) - The

U.S. Export-Import Bank approved a $526 million loan to Guyana

for an energy project designed to double the South American

country's installed electric capacity and reduce oil imports,

the Guyanese government and Ex-Im said on Thursday.

The project, which falls under Ex-Im's mandate to help

exporters facing competition from China, will use natural

gas-powered turbines to generate electricity, Ex-Im said.

Ex-Im said the project will reduce more than 460,000 tonnes

of carbon dioxide per year, or the equivalent of consuming more

than 1 million barrels of oil.

But environmental groups said the financing contradicts

the Biden administration's commitment to aid the transition away

from fossil fuels agreed at COP28 in Dubai last year.

Ex-Im said the loan will support a joint venture that

involves Texas-based Lindsayca and Puerto Rican firm CH4

Systems, with services provided by ExxonMobil ( XOM ), and will

create 1,500 jobs across 11 states and territories.

The two companies had faced direct competition from

China to win the Guyana contract, according to Ex-Im.

"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," said Ex-Im President Reta Jo Lewis.

The project will include construction of a natural gas

separation plant, a 300 MW combined-cycle gas turbine power

plant and a gas supply pipeline near Guyana's capital,

Georgetown.

Friends of the Earth said Ex-Im's support for fossil

fuels since May 2023 has reached almost $3 billion and

contradicts the U.S. commitment at the Organization for Economic

Cooperation and Development and UN climate summits to phase out

fossil fuel exports.

"Investing in solar energy in Guyana would cost less,

reduce costs for ratepayers and generate more local jobs, yet

Ex-Im is intent on pleasing our planet's biggest polluters and

making the Guyana people pay," said Kate DeAngelis, deputy

director of international finance at Friends of the Earth.