Govt to “go back to the drawing board” on Amaila Falls project – Jagdeo

Vice President Dr Bharrat Jagdeo

The Guyana Government has decided to retender the contract for the Amaila Falls Hydropower Project (AFHP) as the current agreement with China Railway First Group Limited (CRFG), has come to an end.

This is according to Vice President Dr Bharrat Jagdeo who spoke with reporters on the sidelines of an event at the Arthur Chung Conference Centre today.

The Vice President explained that government is looking to significantly cut carbon emissions locally by 2030 and the AFHP would have been a critical project in achieving this target.

“Amaila was part of the energy mix to allow us to cut our emissions by 70 per cent and still triple in capacity. So we’re moving forward in the solar component, the gas component, we had the setback on Amaila, we’d expected it to go through but we’ll have to go out back [to tender],” Jagdeo said.

He added, “70 per cent by 2030 because we hope to get it in by 2030 so we still can achieve. It’s still on the card, but currently the project is not moving forward.”

In May of this year, Jagdeo had disclosed that the AFHP is at risk of being delayed and possibly retendered, as CRFG had difficulties in meeting the contract obligations and wants the financing model changed.

CRFG had indicated to the government that it is unable to execute the project in keeping with the Build-Own-Operate-Transfer (BOOT) model and instead wanted to enter into an Engineering, Procurement and Construction (EPC) contract with the government for the project’s development.

Today, Jagdeo explained that the agreement with CRFG has ended and that the government is yet to decide when the project will be retendered and what model will be used in the new contract.

“That’s ended because, as I said a couple months ago, they want to change the model and we can’t change the model.”

“So, we have to go back to the drawing board and then possibly retender at some point in time in the future. So, right now we’re still deciding whether we’ll go out to tender and in what forms but most likely it will be BOOT again…we’re going to try for another BOOT arrangement,” he added.

Nevertheless, he indicated that the government will direct its focus now on the gas-to-energy project.

“We’ve been busy trying to move forward the gas-to-energy project as you could see…the President made some announcements recently so now that we have gone out to tender, we’re expecting bids to come in by September and also by the end of August to get bids in for a project management crew that will oversee that project.”

President Dr Irfaan Ali had recently made it clear that the government will continue to pursue the Amaila Falls Hydropower Project (AFHP), even if it means it has to keep retendering “again and again”.

“Let me be very clear: we are not going to abandon this project,” the Guyanese Head of State told a gathering of Private Sector officials and diplomats during an event at State House. “If we have to go out again and again, we are going to, because we know the studies and everything, including the independent review by Norway, has point to this project as being good for Guyana, being good for the environment, and bringing greater prosperity,” he reasoned. “So, this project will get underway,” President Ali had affirmed.

The revival of the 165-megawatt AFHP 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.

AFHP is expected to deliver a steady source of clean, renewable energy that is affordable and reliable, and is envisioned to meet approximately 90 per cent of Guyana’s domestic energy needs, while removing dependency on fossil fuels.

It is expected that the AFHP will be based on a BOOT model, wherein the company would supply electricity to the Guyana Power and Light (GPL) Inc. at a cost not exceeding US$0.07737 per kWh, and wherein the company would provide the entire equity required by the project and undertake all the risks associated with the project.

The AFHP was first identified in 1976 by the Canadian company Monenco during an extensive survey of hydroelectric power potential in Guyana. Various studies have since justified and strongly supported the construction of the AFHP.

One such study is an independent assessment conducted by Norconsult, a Norwegian engineering and design consultancy firm that was contracted by the Government of Norway. That report had concluded that the only realistic path for Guyana moving towards an emission-free electricity sector is by developing its hydropower potential, and the fastest way forward is through the AFHP.