Dear Editor,
I’VE noted that there appears to be some confusion in the minds of many with regard to the financing of the Amaila Falls Hydro Project (AFHP).

For the benefit of readers, many of whom I presume are ordinary Guyanese, I offer my understanding of the financing of this project, based on what has been put forward by the government.

Between July 25th to August 15th, 2021, there was a public invitation by the government for proposals to be submitted for construction of the AFHP, using two models: Build-Own-Operate-Transfer (BOOT) and Design-Build-Finance (DBF).

This means that any company (Chinese, Americans et al) or even Glen Lall, Kaieteur News, Dr. Tarron Khemraj, et al, could’ve submitted proposals.

But this wasn’t the case. Instead, a total of four companies submitted proposals and the China Railway Group Limited was identified as the most ‘capable partner’ by an Evaluation Committee and is expected to construct the AFHP power station based on the BOOT model.

Under this model, the company will supply electricity to the Guyana Power and Light (GPL) Inc at a cost not exceeding US$0.07737 per KWH.

What does BOOT entail in this instance? What it means is that the cost of construction of the AFHP power station will be borne by the China Railway Group Limited, who would then operate the project for a 20-year BOOT period to recoup their investment.

But during this period, it will supply electricity to GPL at around 7 US cents per kilowatt (GPL currently produces electricity at around 30 US cents per kilowatt). At the end of the BOOT period, the project will be handed over to the government at no cost.

This means that it is the contractor who will foot the bill for construction of AFHP and not the Guyanese taxpayers. It also means that electricity costs will be significantly reduced, as GPL will be buying it at less than it currently costs to produce and will therefore be selling it back to consumers for less than it currently does. In addition, Guyanese will now be assured of a clean and reliable electricity supply.

Yours truly
Erin Northe