IN part three, we looked at the US$80M equity and sought to determine to whom it belongs. We concluded based on the Financial and Administrative Agreement (between the Kingdom

of Norway ((KoN)) and the World Bank) that governs the Guyana Norway Partnership, the US$80M equity, being earned payments, belongs to the Government of Guyana (GoG). We also concluded that based on the Agreement, the earned payments are required to be paid over by the KoN to the World Bank, which acts as Trustee under the Agreement. In this article, we offer our views on how to utilise this US$80M earned payments. However, the first challenge, in our opinion, would be getting the US$80M into the Trustee’s account.

Transferring the US$80M into the Trustee’s Account
Firstly, we do not pretend to have a clear answer to what might be quite a dilemma, since the rules of the Agreement were broken, bypassed, side-stepped or simply ignored. What is clear to us is that the US$80M represents earned payments and therefore should have been paid into the Trustee’s account. In our view, the GoG should officially request of the KoN that the US$80M be paid into the Trustee’s account. We also believe that the Inter-American Development Bank (IDB) should be more than willing to relinquish the US$80M it holds in a holding account, since the Agreement makes no provision for any payments to be deposited directly into the IDB’s account.

From our perspective, these are government-to-government issues. Having regard to the fact that it was the Norwegian Ministry of Foreign Affairs that signed the Financial and Administration Agreement, on behalf of the KoN, this is an important reason for Guyana’s Ministry of Foreign Affairs to counterpart this issue, even though we recognise that matters relating to the environment are led by the Ministry of the Presidency. Secondly, it is the duty of the KoN to delink the US$80M from the Amaila Falls Hydro Project (AFHP) and link it to earned payments in the first instance, as per the Agreement, and thereafter to alternative energy projects.
Such a process, we submit, will allow for the funds to be transferred to the Trustee’s account and be available to the GoG for projects.

How should GoG Invest the US$80M?
There should be no doubt, on the part of the KoN, that the US$80M would be used in the area of alternative energy. This assurance has been given in the nation’s Parliament via budget speeches in 2015 and 2016, in the nation’s submission to the UNFCCC on its intended national determined contributions to reduce green-house gases from the atmosphere, presidential speeches on the green economy and green state development and within the objectives of the LCDS. With this commitment in the bank, how should we invest the USD 80M? We recommend for consideration a comprehensive hydropower update study; making the GPL more efficient and investing in solar farms.

Comprehensive Hydropower Update Studies
There is quite a lot of talk about hydropower potential and commercial viability in Guyana. In fact, the Norconsult Report of the AFHP, quoting Guyana’s Power Generation System Expansion Study of 2016, stated that in terms of power, “Guyana’s exploitable hydro potential has been estimated at 8,400 MW.” We believe that an updated study, using part of the US$80M, will provide certainty and bankable information of Guyana’s potential, while at the same time addressing deficiencies surrounding technical information required in developing hydropower projects. In addition, it is an opportunity for Guyana to generate new knowledge in this field.

Making GPL More Efficient
Admittedly, the question of whether GPL should operate and regulate or regulate only is a critical debate in determining the efficiency of the electricity sector. That is a matter we will examine when we begin the energy series. For now, we will limit the analysis to Guyana Power & Light (GPL) as is. We believe the GoG should develop a project to be funded by the Guyana REDD+ Investment Fund (GRIF), that incorporates current GPL initiatives, particularly the GPL/ IDB Power Utility Upgrade Programme of 2014; the Initial Study on System Expansion of the Generation & Transmission System of July 2014, which was upgraded by the Guyana Power Generation System Expansion Study of June 2016 and use those findings as baseline data for a conclusive study on electricity supply within the context of Guyana’s new green development framework.

Line-loss reduction, mechanisms for integrating solar power (individual household, industry, or group) into its grid, legislative upgrade, green-energy matrices, base- load energy review, solar farming, wind power, tidal power, wave power, and smart metering are key project ideas for the general electricity supply efficiency upgrade of GPL. In other words, GPL must prepare itself to deliver electricity at the cheapest cost to consumers.

Though I mentioned that the debate on ‘operating v regulating’ is still to be conducted, I feel bound to say, at this juncture, that a competitive platform for the delivery of electrical power is likely to yield cheaper costs for electrical power. In this scenario, GPL can also compete as a supplier of electrical power, separate and apart from its business of commercialising its transmission and distribution services to the winning power company or companies.

Solar Farms Investment
Given the geography and topography of Guyana, solar as an energy source, suits open terrain. This means that Guyana’s island communities (Leguan, Wakenaam, Hogg Island) hinterland and remote communities (Bartica, Mahdia, Lethem, Mabaruma) and remote coastal communities (Essequibo Coast, Upper Corentyne) are prime areas for solar power application with grid tie and feed-in power.

Due to the fact that these communities, except, the remote coastal ones, are independent grids, a great opportunity awaits GPL in terms of introducing, testing and adjusting new technologies without creating potential upset to a large consumer base. With solar and solar-storage costs going down, solar farming will result in reducing the cost per kw/h for consumers. Another important advantage that accrues is the proximity of abundant water for hydropower development to complement solar as a source of power over the long term. These are all “good life” issues that are low-hanging fruits ripe for the taking.

Next week, I shall be discussing — given the high risk to the project — why wasn’t an independent power producer model for the AFHP propositioned for acceptance, instead of the current financial configuration of high risk sharing on the part of Guyana and, assuming the AFHP is doable, then why doesn’t or didn’t the KoN, any other friendly country or company finance the entire project?

Mr Gary A R Best is a retired Rear Admiral and former Chief-of-Staff of the Guyana Defence Force. He is an Attorney at Law and Presidential Advisor on the Environment. He is a PhD candidate at the University of the West Indies. He holds a BSc in Nautical Science (Brazil) and Masters Degrees from the University of the West Indies and the University of London. He is also an alumnus of the National Defence University and Harvard Kennedy School. His research areas include, climate change governance, climate change finance, international relations and environmental law.  

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