Amaila Hydro project very much alive

March 29, 2014, By KNews, Filed Under News, Source

Construction of the 165 MW Amaila Falls Hydropower Plant is still on Government’s radar with the private developer and majority equity investor in the project, the Blackstone Group and Sithe Global, seemingly still interested in the project.

This is according to President Donald Ramotar during a press conference, on Thursday, at the Office of the President. He was at the time commenting on a US$80M allocation in this year’s budget for the project.

President
Donald Ramotar

The Head of State reminded media operatives that he has always indicated that Government has not given up on the project, even though the investor had pulled out of the country owing to non-consensus in the National Assembly.

“It is a pity it didn’t start last year…It’s still on our radar…Although these are preliminary things we are speaking of I don’t believe we have lost Sithe Global or Blackstone. But I have said if we do lose them we will look for alternatives, but at the moment we are not convinced that we lost them,” he said.

In August 2013, Sithe Global pulled out of Guyana but apparently did not abandon the project since it possessed the licence to develop a hydro-electric power station, reservoir, transmission to the coast.

There were concerns that the US$840M project was unsustainable and the cost would have climbed to US$1B. In addition, up to the end of 2013 there was no word from the Inter-American Development Bank (IDB) as to whether financial closure was secured for the project.

However, as far as Ramotar is aware, the project is still being reviewed by the IDB Board. He is hoping that the Board would conclude that aspect in the not too distant future so that the project could get financial closure.

Ramotar noted that the US$80M is coming from the GRIFT account held by the World Bank. This amount is Government’s equity into the project. The IDB is the partnering entity to assist in the implementation of the project. And, the local implementing agencies are the Project Management Office (Office of President) and NICIL.

According to the guyanareddfund.org, “The Amaila Falls Hydropower Project is the flagship of Guyana’s Low Carbon Development Strategy. Amaila will deliver a steady source of clean, renewable energy that is affordable and reliable and is envisioned to meet approximately 90 percent of Guyana’s domestic energy needs while removing dependency on fossil fuels.”

It stated that the project involves (i) a hydropower plant at the confluence of the Amaila and Kuribrong rivers; and (ii) an electrical interconnection facility, consisting of about 270km of high-voltage redundant transmission line and two sub-stations (these two components will be developed by the Sithe Global group of companies, a US-based international energy firm with a proven track record of developing energy projects across the world).

The project also involves the construction of an access road to the plant, consisting of approximately 85km of new roads and an upgrade of about 122km of existing roads. This is being undertaken by Government.

In September 2012 the Engineering, Procurement and Construction (EPC) agreement was signed between Sithe Global and China Railway First Group. A Mandate Letter was also signed in September 2012 between the IDB and Sithe Global. It represents a critical piece of the project financing scheme.

The website stated, “This significant step forward allows the lenders of the Project (the IDB and China Development Bank) to proceed with the final phase of due diligence and draft the required financing documentation.”