– President
PRESIDENT Bharrat Jagdeo has announced that part of the US$30M expected to be delivered through the Memorandum of Understanding between Guyana and Norway will be used to buy equity in the Amaila Falls Hydro Project, further reducing the cost of financing the venture.
He was on Friday speaking at a reception at the International Conference Centre at Liliendaal held in his honour for being one of six persons conferred with the 2010 Champion of the Earth Award in Seoul, Republic of Korea on April 22.
According to the MOU with Norway, Guyana will be receiving some US$250M up to 2015, provided stringent monitoring and verification and financial accountability criteria are met.
Construction of the Amaila Falls project will commence in 2011, according to Minister of Finance Dr. Ashni Singh at a recent press conference.
“Within a matter of months, US$30 million will come to Guyana,” President Jagdeo said, adding that he has already notified the National Assembly of this.
He said that using money from the Norway agreement will mean that electricity tariffs for consumers will come down further than earlier calculated. He explained that equity is the method of financing that offers the most returns.
The project is estimated to cost between US$500 and US$600M, and it is expected that financing will come from a blend of equity, multilateral and bilateral financing and some injection of Government funds.
It is likely that both the Inter-American Development Bank (IDB) and the China Development Bank will play an integral part in providing some of the multilateral financing for the project.
Minister Singh held engagements some weeks ago during the meeting of the IDB Board of Governors in Cancun Mexico and said that the importance of the Amaila Falls Hydro Project to Guyana has not been lost on these two institutions.
Government has already made a commitment to funding the approach road to the project in a bid to reduce the overall cost of the financing by reducing the project duration. A contract for this road has been awarded to Synergy Holdings Inc.
The project, which will take about four years to be completed, is expected to have the capacity to provide over 140 megawatts of electricity. It will be located along the Kuribrong River in Potaro, Region Eight, in the Potaro/ Siparuni district.
The President is on record as saying that the development of renewable energy sources is needed to increase energy security, and maintain macro-economic stability, since Guyana’s fuel import bill is US$350 million annually.
Dr. Singh said that the project will transform Guyana’s energy use from non-renewable to clean energy, and that this will have implications for volume, affordability and reliability of power and the cost of doing business.
Sithe Global Power, LLC, based in New York, is an international development company involved in the construction, acquisition and operation of electric power generation facilities.
The company began as Sithe Energies Inc. in 1968, and has since become one of the largest power producers in the United States. Sithe has developed over 50 power plant projects in nine countries, with a capital investment of over US$5 billion.
A project such as the Amaila Falls Hydropower facility will reduce significantly Guyana’s dependence on foreign oil, bring in foreign exchange savings, and also reduce the country’s emissions of carbon dioxide.
Further, Guyana could potentially earn incentives for the project through the Clean Development Mechanism (CDM) of the Kyoto Protocol. Those incentives are based on Certified Emissions Reductions (CERs) resulting from the project.