Govt opens tender for construction of Amaila Falls Hydro Project

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− aiming to start in 2022 and complete by 2025

The Amaila Falls Hydropower Project (AFHP), which was shuttered by the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government, is now back on the table as tenders have been released for the potentially transformative project.

This goes toward a promise the People’s Progressive Party (PPP) made while they were in Opposition and on the 2020 General and Regional Elections campaign trail. According to a Request For Proposal (RFP), the PPP Government is aiming to start construction on the project by the second half of 2022.

Additionally, the RFP which was issued by the Office of the Prime Minister indicates that the Government is eyeing completion of the project by the end of 2025. The responses to the RFP, including all documents requested in the tender, must be submitted by September 26, 2021.

According to the tender, the Guyana Power and Light (GPL) in its Development and Expansion (D&E) plan for 2021 to 2025, estimates that by 2025 some 465 Megawatts (MW) and 2900 Gigawatt hours (GWH) of power will be needed.

It was further noted that the Government wants an energy mix that uses both natural gas (a reference to the gas-to-shore project) and Heavy Fuel Oil (HFO), as well as renewable energy like hydro power, wind and solar.

“By 2026, the Government of Guyana expects demand to be met by dispatching from its lowest cost of supply, which is expected to be derived from gas (up to 300 MW), Amaila (165 MW) and other renewables and non-renewable capacity to make up any balance or serve as a backup,” the RFP explains.

An artist’s impression of the Amaila Falls Hydropower Project dam

When it comes to the scope of work, the project entails the construction of a 165 MW installed hydro dam, plant and related works, as well as transmission lines and structures from Amaila Falls in Region Eight (Potaro-Siparuni) to Sophia, Greater Georgetown.

They must also create 230 kV substations in Linden and Sophia, as well as a 23 square km storage reservoir. Additionally, the contractor will be expected to upgrade and complete roads and bridges to the site and assume all geotechnical risks associated with the project.

Two options are on the table for bidders in the RFP – Build Own Operate Transfer (BOOT) and Design Build Finance (DBF). According to the RFP, bidders must respond to both options, with the best one being chosen by the Government.

BOOT

In the case of the BOOT option, developers were asked to “state the cost (per Kilowatt) and equivalent annual payment for power delivered to Sophia, Georgetown on the basis of a 20-year BOOT (period starting from commercial operations date), with all of the costs of the project to commissioning date, being borne by the developer and the project reverting to the Government at the end of the BOOT period, at no cost. All appropriate assumptions including cost of capital, equity, debt and operating costs should be stated.”

Meanwhile, the DBF option stipulates those developers must provide information on the cost per kilowatt for power delivered to Sophia. They must also finance the project on the sole condition that the Government of Guyana takes possession of the project and the debt once the project is completed and commissioned.

“Financing repayment will only start on successful takeover of the project in accordance with contract terms. The developer should state the project cost, financing details and all other assumptions including operating costs and debt service. Terms such as interest rate, loan tenure, loan conditions, capitalisation of interest during construction and a draft financing term sheet should be provided,” the RFP said.

The Amaila Falls

Meanwhile, prospective bidders were urged to include in their submissions, a detailed record of similar projects they have completed, evidence of financial ability and three years of financial statements.

Bidders will also be expected to review all existing project documents and technical studies that were available at the end of 2015 on AFHP. Additionally, they will be expected to submit details on their proposed plans for achieving local content including sub-contractors and what percentage of the project costs will be sourced locally.

The revival of the 165-megawatt Amaila Falls Hydropower Project was one of the promises made by the People’s Progressive Party/Civic in its manifesto. The project was initiated under the previous PPP/C Administration but was scrapped by the coalition Administration which had controlled the National Assembly by a one-seat Opposition majority.

Further, when it got into office following the 2015 elections, the APNU/AFC had gotten clearance from Norway to divert the monies that were initially set aside for Amaila Falls to fund a 100-megawatt solar energy project. The Amaila Falls Hydropower Project was the flagship of Guyana’s Low Carbon Development Strategy (LCDS).

Amaila was expected to deliver a steady source of clean, renewable energy that would have been affordable and reliable, and was envisioned to meet approximately 90 per cent of Guyana’s domestic energy needs while removing dependency on fossil fuels. (Published in the Guyana Times)