The Government is relooking at the financing options for the Amaila Falls Hydropower Project (AFHP), with Vice President Bharrat Jagdeo revealing that the project is likely to cost even less than the price quoted during the People’s Progressive Party’s (PPP) previous term in office.
During an engagement on Monday with publishers, media house owners, editors-in-chief and senior media workers at the Arthur Chung Conference Centre, Jagdeo explained that global interest rates have fallen in light of global events.
“We’re looking at it, but no decision has been made as yet. But we’re relooking at the numbers though, because the project cost was just over US$500 million. The rest of it was financing cost,” Jagdeo said.
“And now, because interest rates have come down so low globally, we believe we could get the numbers to come down significantly on Amaila, because the cost of financing should be lower now. But we’re examining that and we’re starting to look at it soon.”
The Vice President noted that bad press and misinformation was primarily responsible for killing the AFHP, which had the potential to supply 165 megawatts of power to the national grid. This would have been renewable power at that, which would have gone some way in Guyana’s efforts to use greener and cleaner energy sources.
“You recall what happened in the newspapers. They said that Amaila Falls, the price will go up for power and it was 10 cents per kilowatt per hour and at that time we were generating at 20 cents. They said there would be a $2 billion debt and really, there was zero debt.”
“It was $750 million of contingent liability. So that is why, when APNU came into office, Norway did a study. Because they were claiming corruption and all of that. And they found that Amaila Falls is still the best project. That was done by Norconsult. So that killed that project. Bad politics and bad press that is not factually based.”
Jagdeo recalled that then National Industrial and Commercial Investments Limited (NICIL) Head Winston Brassington and then President Donald Ramotar had the requisite documents tabled in the National Assembly.
“The stacks of studies we had. We had environmental studies, maybe $16 million was spent on project preparation. Went down the drain. They said we wouldn’t have water, the river. But you (can) build reservoirs,” Jagdeo explained.
The Guyana Power and Light (GPL), which has in the past been plagued with sporadic periods of unreliability, heavily relies on Heavy Fuel Oil (HFO). This is despite the advice of industry experts who have long recommended Guyana integrate renewable energy into its power grid.
The AFHP, a brainchild of the previous People’s Progressive Party (PPP) which would have done just that, was shelved soon after the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government came to office. The lack of investors was cited.
PPP has contended that the AFHP could have been generating about 50 per cent more electricity than the entire GPL supply. Indeed, the 165-megawatt project has the potential to eclipse GPL’s current supply of 120 megawatts to the grid.
Prime Minister Mark Phillips, who has responsibility for energy, has, however, said that the Government intends to complete the AFHP. In the meantime, the Government is also forging ahead with its gas-to-shore project which will generate close to 200-megawatts.