"Ahh Building ahh Hydroelectric Dam

Ahh Growing Ginger and Ahh Growing Yam"

Caribbean Man

By The Tradewinds

https://www.youtube.com/watch?v=WmoulDIftOo

Caribbean Man -- by the Tradewinds

Keep the fingers crossed ,Guyana experienced two failures Moco Moco Hydro and Skeldon Sugar Factory ,also the ongoing construction CJIA.

Crossing fingers, crossing legs, they don't help where doing business with China is concerned.

Guyana will pay for Amaila through Power Purchase deal with GPL

…as Govt. approaches Chinese contractor to build, own, operate and transfer Hydro Project – Jagdeo

Nov 03, 2021 News -- Source -- Kaieteur News Inline -- https://www.kaieteurnewsonline...chase-deal-with-gpl/

Kaieteur News – The Guyana Government is forging ahead with its plans to construct a 165 mega watt (MW) Hydro Electric Plant, using the Amaila Falls as its energy source.

It has since retained the controversial Chinese contractor, China Railway First Group (CRFG)—the company that had previously signed a contract to build the said project several years ago and to be paid for by power purchased from the project.

This was confirmed by Vice President, Bharrat Jagdeo, who on Monday during a press engagement at the Arthur Chung Conference Centre (ACCC), told reporters that a decision had been taken at the last Cabinet meeting, and that government would be approaching the selected contractor to negotiate on the way forward.

The Ministry of Finance, in a subsequent public missive corroborated the Vice President’s assertions saying, that Cabinet had given its ‘No Objection’ to the company, as evaluated by the National Procurement and Tender Administration Board (NPTAB).

Government had earlier this year advertised, soliciting a private partner to fund and develop the project and according to the notice published at the time there had been two proposals on offer.

Power Purchase Agreement
The first option advertised, Build-Own-Operate-Transfer (BOOT) where the developer would operate the project for a 20-year period before handing it over to the government, at no cost.

The second option, Design-Build-Finance, where the government would take over the project at the commissioning date and initiate repayment of the financing in accordance with contract terms.

According to Vice President Jagdeo, government has since opted for the proposal identified in the first offer, where the selected contractor would also finance the project.

He was adamant that , in such a situation, government would bear none of the risks financial or otherwise and that the project would be repaid for through the Power Purchase Agreement (PPA) that would have to be signed with the Guyana Power and Light Inc (GPL).

The Vice President told reporters, “…we have a really great bid” and explained that in this iteration of the Amaila Falls Hydro Electric Project (AFHEP), “we are not going to put any money into the project, we are just buying power.”

The Vice President used the occasion to explain that during its initial attempt at constructing AFHEP, the administration had sought to lower the cost of electricity being produced, by buying into equity since debt financing would have been costlier.

According to Jagdeo however, this time around, it is expected that the project would be cheaper as a result of lower interest rates but even ahead of negotiations with the contractor.

As such, he said the administration is looking to generate power at some US$0.07 (cents) per kilo watt hour (KWH).

Most Capable
The Ministry of Finance in its missive confirming the Cabinet Decision, on Monday evening said, the ‘no objection’ was granted for the Office of the Prime Minister, to engage China Railway Group Limited to construct AFHEP.

This, the ministry said would be pursued based on a BOOT model where the company will supply electricity to the Guyana Power and Light GPL Inc. “at a cost not exceeding US$0.07737 per KWH and where the company will provide the entire equity required by the project and undertake all the risks associated with the project.”

According to the ministry, a total of four companies submitted proposals, and China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee after a rigorous evaluation process, following which NPTAB submitted the relevant recommendation to Cabinet for ‘no objection.’

It should be noted that checks conducted by this publication found that China Railway was in 2019 debarred by the World Bank for practices considered fraudulent on a highway project in the country of Georgia.

Vice President Bharrat Jagdeo addressing the issue of the Amaila Falls Hydro Electric Project.

China Railway was established in 1950 and is a subsidiary of China Railway Engineering Group (CREG).

Good Profit
Meanwhile, Vice President Jagdeo continues to defend the project. During his press engagement on Monday, told reporters, “we are not going to put any money into the project, we are just buying power and at 7.7 cents” and suggested that this could possibly be lowered “because we are still to do some negotiations.”

He speculated that with GPL purchasing power at that price, “we can still sell power at 15 cents per KWH which we are hoping to do, because now it’s 30 cents, and still make a good profit for GPL….we are very pleased that the bids came in and we have these offers now and the project is going to move forward.”

Lamenting the outcome of the previous iteration of the project coupled with the likelihood of a reduced construction cost this time around, Vice President Jagdeo reminded that it was the then political opposition that had refused to raise the debt ceiling for guarantees by government.

According to President Jagdeo, Guyana at the time was not incurring a debt but rather would have had to spend about $700M to guarantee payment for the power.

He said, even after killing the project the then political opposition when it took Office in 2015, approached bilateral partner Norway, to conduct additional studies on the project.

The Vice President reported that at the time, the Norwegians had again concluded that the Amaila Falls site was the best suited location to provide base-load power from a renewable source.

Location Justified
Arguing against solar as a base-load supply for electricity, Jagdeo again pointed to the lack of sunshine for days at a time and the likelihood the country remaining without power.

He did say however, that the US$80M that Guyana had earned from Norway would be invested in large scale solar farms but that these would not be used as base-load, since AFHEP and the proposed Gas to Energy Project would serve this purpose.

As it relates to the Hydro Project, Jagdeo said the only way to achieve renewable targets “is basically through the construction of the hydro power…the report from Norway said we should retender and I am happy we did.”

Reminding that millions of US dollars had already been expended on the necessary environmental and other studies required ahead of the project, Jagdeo reminded reporters that a US Company, Blackstone, through its subsidiary was ready to proceed with the project before “the opposition machinations” that saw the company withdrawing.

The Ministry of Finance in providing some background into the history of the project noted that the site was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey for hydroelectric power potential in Guyana. It said various studies have since justified and strongly supported the construction of the AFHEP.

“Recognising the suitability and attractiveness of the project, the pre-2015 PPP/C (Peoples Progressive Party/Civic) Government had advanced preparation of AFHP (sic) by conducting extensive technical and financial studies of the project, including an environmental and social impact assessment (ESIA),” the ministry said.

According to the Finance Ministry, “in its current formulation, it is expected that the project will require no equity contribution from Government, in comparison with the previous project structure which was based on a Government contribution of US$100 million.”

Additionally, “the current structure anticipates a cost of power that will be lower than the initial cost of 11 cents per KWH contemplated by the previous project structure.”

POTENTIAL HYDROPOWER SITES  -- GUYANA

SOURCE -- https://gea.gov.gy/hydro/

China Railway is one of the largest engineering firms in the world. If they fall at this project then it has to be very difficult to do

Cheap, reliable electricity on horizon with AFHP

— says Dr. Singh

By Staff Reporter | November 6, 2021 --  Source - Guyana Chronicle -- https://guyanachronicle.com/20...n-horizon-with-afhp/

An artist’s impression of the Amaila Falls Hydropower facility

HAD the Amaila Falls Hydropower Project progressed as initially planned, cheaper and more reliable power would have already been enjoyed today, said Senior Minister in the Office of the President with responsibility for Finance, Dr. Ashni Singh.

Appearing on a televised programme hosted by Travis Bruce on Friday evening, Minister Singh said that even though the merits of the project had long been established, the A Partnership for National Unity + Alliance For Change (APNU+AFC) spared no effort to kill the project.

Dr. Singh, in attempting to rationalise the Coalition’s grievances against the project, concluded that it might have been a situation which can be described by the saying of “cutting off your nose to spite your face.”

“There is no other reason but to obstruct and frustrate this project… because they [the former Coalition Government] believed that it [the benefits of the project] will somehow redound to the credit of the People’s Progressive Party/Civic,” Dr. Singh surmised.

He went further to lament the fact that although tanking the ground-breaking project, the then David Granger-led government did nothing to propose an alternative of any sort. But even so, the APNU+AFC went ahead to make a global pledge that by 2025, Guyana will be using 100 per cent renewable energy.

Former President and current Vice-President, Dr. Bharrat Jagdeo recently criticised the former government for making international pledges without putting any realistic systems in place to achieve them.

With the Amaila Falls Hydropower project out of the way, the then government failed to institute other initiatives which could help enable Guyana to deliver on its pledge. As a result of the “unrealistic” and “unachievable” pledge, President Dr. Irfaan Ali was forced to return to the United Nations’ Climate Change Conference in Glasgow, Scotland, to admit to Guyana’s error, and recommit to 75 per cent renewable energy.

This, according to Minister Singh, will be achieved not only by way of the Amaila Falls project, but will see the establishment of several smaller-scale hydros and solar power projects. Moreover, with Guyana now an oil and natural gas producer, the government is gearing up to realise a landmark US$900 million gas-to-shore project, which will convert gas into power to be supplied to the national grid.

Dr. Singh said that his government is cognisant of the fact that expensive and unreliable power is not only a bugbear within homes and communities, but also a hindrance to investments as well.

As it is, the Irfaan Ali Cabinet has granted its ‘no-objection’ for the Office of the Prime Minister to engage the China Railway Group Limited to construct the Amaila Falls Hydropower Station (AFHP) based on a Build-Own-Operate-Transfer (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.

The AFHP was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey of hydroelectric power potential in Guyana.

Various studies have since justified and strongly supported construction of the AFHP. Recognising the suitability and attractiveness of the project, the pre-2015 PPP/C Government had advanced preparation of AFHP by conducting extensive technical and financial studies of the project, including an Environmental and Social Impact Assessment (ESIA)

The then PPP/C Government had also mobilised international investor interest in the project, and a major private international investor (the Blackstone Group) had expressed serious interest in undertaking it. Additionally, the then government had earmarked US$80 million earned by Guyana under the Guyana-Norway partnership within the Low Carbon Development Strategy (LCDS) to help finance equity in the project.

When the APNU+AFC assumed office in 2015, it retained a Norwegian company to conduct a further assessment; even that gave value to the AFHP, but could not save it from being killed. The government has expressed hope to have the power plant up and running by 2025.

There is something that is not being reported about the Amaila Falls project.  So far we have been told that the China Railway Group will finance and build the plant and that it will sell power to GPL at a price not to exceed approx. 8 cents US per KWH.  GPL currently charges consumers about 25US cents per KWH.  Therefore, as it does now, GPL will be making a profit on the sale of Amaila produced electricity. Jagdeo said something about charging less once Amaila is operational.  A couple of things: 1) recently the government wrote to the Chinese government seeking a loan of US1.5B to finance among other projects Amaila .  Did Jagdeo not say that China Railway will finance the project; 2) if you were the boss at China Railway wouldn't you want a guarantee that GPL will buy all the power you can produce?  Wouldn't there be a breakeven point that you have calculated below which you would lose money?  It is highly likely that a guarantee has been provided to buy a certain amount (or all) of power produced irrespective of whether GPL needs it.  If the gas to shore project materializes supply may very well exceed demand. As they have done elsewhere, Exxon will ensure that the government buys all the gas it can produce irrespective of whether the government needs it. The cost will be passed on to consumers, including Uncle Tularam from Tapside.   

poor uncle Tula