-Amaila Falls framework agreement signed in Shanghai
CHINA will be supporting construction of the Amaila Falls hydro-electricity project which President Bharrat Jagdeo yesterday called the “flagship” of Guyana’s Low Carbon Development Strategy (LCDS).
Mr. Jagdeo was in Shanghai, China to witness the signing of a framework agreement between the parties to the Amaila Falls hydro project which sets out their intention to reach financial closure within 12 months, “or ideally sooner”, Finance Minister, Dr. Ashni Singh said.
The Guyana Government said yesterday’s signing formalises the co-operation between Guyana Power and Light (GPL), Sithe Global Amaila Holdings, the China Development Bank, and the China Railway First Group.
After the agreement was signed, President Jagdeo said: “For years we have been advocating that it is possible to align the developmental interests of small poor countries with the global need to combat climate change.”
He added: “The Amaila Falls hydro-electricity plant – which came a step closer to reality today – is proof of this. It will deliver cheaper energy, and at a stroke remove virtually the entirety of Guyana’s energy related greenhouse gas emissions. So it is good for Guyanese consumers and businesses, it is good for the Guyanese economy, and it is good for the world.”
Minister Singh informed the National Assembly shortly after the framework agreement was signed yesterday, hailing it as an “historic moment”.
“The Amaila Falls project is the biggest infrastructure investment in our country’s history”, he noted.
Singh added: “From the start of its operations, it will provide value to Guyanese citizens and the wider economy through cheaper electricity, while simultaneously enabling Guyana to switch from nearly 100% dependence on fossil fuel sources for electricity generation to nearly 100% clean, renewable energy sources.
“Then, 20 years after it starts operating, the hydro-electricity plant will be transferred to the people of Guyana at zero additional cost – thereby bequeathing long-term energy independence, national competitiveness and environmental sustainability to our children and future generations.”
Sithe Global Amaila Holdings is an 80% subsidiary of the Blackstone Group of the
United States of America, one of the world’s largest private equity companies with an investment portfolio of over US$100 Billion of assets under management.
Sithe, directly and indirectly via its management team, has completed more than 15 hydro-electricity projects around the world, and 15,000 MW of energy projects.
The China Railway Group is the world’s 133rd largest company, with annual revenues in excess of US$52 billion and was selected as the construction partner following a competitive bid process that started in 2008, when an Expression of Interest document was delivered to more than 30 firms with the capacity to take on a project of this nature.
According to the LCDS, the project will involve utilizing less than 0.001% of the State Forest area, and Minister Singh reiterated the government’s commitment “to ensuring that the project complies with both national and international social and environmental safeguards”.
President Jagdeo and Norway’s Prime Minister Jens Stoltenberg this week announced the establishment of the Guyana REDD+ Investment Fund (GRIF) and stated that they have invited the World Bank to act as the fund manager.
Norway will be the first contributor to the GRIF and will pay US$30M into the fund when it is established, planned at the end of this month. The payment is in recognition of Guyana’s efforts to protect its 16 million hectare rainforest and follows the memorandum of understanding signed by the two countries in November last year.
Under the agreement, Norway intends to pay up to US$250M into the GRIF between 2010 and 2015, based on Guyana’s performance in avoiding greenhouse gas emissions from deforestation and forest degradation, as well as Guyana’s ongoing and planned strengthening of inclusive and transparent forest management.
Guyana will invest GRIF revenues to implement the LCDS.
The government said this will enable Guyana to place its forest under long-term protection, catalyse public and private investment for clean energy (to move virtually the entire economy away from fossil fuel energy dependence), and create new low carbon economic and employment opportunities for forest dependent communities and other Guyanese citizens.