Norway is keeping US$80 million of funding from its forest-saving deal with Guyana for the
Amaila Falls Hydro Project, but the funds could be diverted to other clean energy initiatives if the project is deemed impractical, Finance Minister Winston Jordan said
Tuesday.

The two parties also face a tough deadline to determine the use of the funds; if a
decision is not made by June next year, the funds would go back to Norway, Jordan admitted. Jordan and some members of the Guyanese delegation first met with the Norwegian Minister of the Environment Tine Sundtof and later Raphael Trotman, Minister with responsibility for natural resources and the environment, Minister Jordan and members of the Guyana delegation met with Andreas Tveteraas, Deputy Director of Norway’s Climate and Forest Initiative.

The governments of Guyana and Norway have agreed that a “once and for all” study should be
done to determine the feasibility of the Amaila Falls Hydro Project. Norway will decide if it will ask the Inter-American Development Bank (IDB) to conduct the study or choose another independent contractor. The IDB’s representative in Guyana Sophie Makonnen was also at Tuesday’s meeting, held at Le Bourget conference centre on the outskirts of Paris where the UN Climate Conference is ongoing.
“Our position remains the same, in its current conceptualisation we can’t go with it,”

Minister Jordan said of the Amaila Falls Hydro Project after the meeting.

He said the project as conceptualised is too costly, “We think it (was) not properly
studied; we think it has engineering and environmental issues.” Jordan said that both
sides agreed on the study. “We welcome it so as far as that it will bring some finality
to the issues that have been swirling over the project, once and for all.”
If the project is deemed viable, then Jordan said the government will have to seek a
sponsor; and if it is not deemed feasible, then the two sides will have to decide on
what will happen with the US$80 million Norway had committed to the Amaila Falls project.
Given the June deadline when the funds would have had to be directed, Minister Jordan
said the two sides agreed that whatever work needs to be done to determine the feasibility
of the project has to be done by then.

In August 2013, the developer of the project, Sithe Global, pulled out, saying its
development funds hinged on support from all political forces. The current coalition
government then made up of APNU and AFC as separate opposition parties, refused to
support the project in the form it was presented, saying it would put the country under
a severe debt burden and that there was no guarantee that power from Amaila would have
been cheaper for Guyanese. In addition to equity financing, Amaila’s cost, which kept
increasing, would have come from loans from the Inter-American Development Bank and the
China Development Bank.
The Amaila Falls Hydro Project was designed as a 165-megawatt facility, which would have
delivered its power to consumers via power lines running through the jungle and onto
various distribution points along the coast and other areas.
In preparing for the project, the former government spent over $US30 million to build
a road to Amaila Falls. Originally it was contracted at US$15 million to Florida puja
shop owner Fip Motilall, but despite vehement protests, the then Bharrat Jagdeo
administration pressed ahead with Motilall. The contractor was fired in January 2012,
soon after Donald Ramotar became president. The road contract was then handed out in
parcels to various contractors. Minister Jordan said that with the money already spent
on the project, uses have to be found for it, if the Amaila Falls project has to be
abandoned. “It cannot be abandoned; there will have to be options.”

Only recently government announced that five out of 67 possible sites are currently
being assessed by the IDB for development of hydropower. The assessment is expected
to be completed by May 2016. Minister of Public Infrastructure David Patterson said
the five sites are Kamira, Kumu, Tumatumari, Tiger Hill and Amaila. The government will
be using $80M from the Norway funds that were set aside for renewable energy development.

“At the end of this process, we will obviously assess them, however we will look to
use the $80M in the most acceptable means of renewable energy … but it could be any
form of large scale renewable energy – which is the understanding that we have so
it’s a process which we are going through, and I think it’s a wise way to go forward,”
Minister Patterson stated.

The Guyana Government is also working with the Government of Brazil and other interested
stakeholders in seeking additional funding for the hydro power/renewable energy project.
“We are moving ahead, and we are working through the Ministry of Foreign Affairs
continuing discussions with them. There are other individuals who have MOUs. I think Kumu
falls, there is a company that has an MOU with us and it remains to develop that falls,
Tumatumari, Moco Moco – we are going out for an expression of interest to resuscitate
the Moco Moco hydro falls so we haven’t excluded any project. It’s always a question of
time and cost,” the minister explained.
Renewable energy has been identified as a growth industry and Guyana has an abundance of
wind, sun and water. Harnessing their potential would be a game changer for Guyana as it
is believed that the country has enough capacity to not only satisfy its own energy
demands, but to sell excess to its neighbours.

By Neil Marks in Paris