The Amaila Falls
July 25 ,2021
The government has issued a Request For Proposals (RFP) to restart the scrapped Amaila Falls Hydro Project, for which it wants construction to begin by the second half of 2022.
According to the RFP, which was issued by the Office of the Prime Minister, the Government of Guyana (GOG) wants to have the project completed and commissioned by the end of 2025.
It explains that Guyana Power and Light’s current Development and Expansion (D&E) Plan for 2021 to 2025 projects total capacity required in 2025 as 465 MW and energy of 2,900 GWH. “The GOG proposes an energy mix that will utilize both natural gas, Heavy Fuel Oil, and renewables (hydro, wind, solar). In 2026, the GoG expects demand to be met by dispatching from its lowest cost of supply, which is expected to be derived from gas (up to 300 MW), Amaila (165 MW), and other renewables and non-renewable capacity to make up any balance or serve as back-up,” it adds.
According to the RFP, the Summary of Scope of Works entails a 165 MW installed hydro dam, plant, and related works; Transmission Line and Structures: 270 KM double-circuit 230 KV from Amaila to Sophia; 230 KV Substations in Linden and Sophia; Creation of a 23 square KM storage reservoir; upgrades and completion of roads and bridges to the site (85 KM new; 122 KM existing); and assumption of all geo-technical risks including guarantees relating to the structure of the reservoir, dam, and transmission towers.
Government has asked that proposals submitted by prospective developers be made under both the Build-Own-Operate-Transfer (BOOT) and Design-Build-Finance (D-B-F) models.
Under the BOOT model, it asks that firms state the cost/ kWh [and equivalent annual payment] for power delivered to Sophia, Georgetown, on the basis of a 20-year BOOT (period starting from Commercial Operations Date), with all of the costs of the project to commissioning date, being borne by the Developer, and the project reverting to the Government at the end of the BOOT period, at no cost. All appropriate assumptions including cost of capital, equity, debt, and operating costs should be stated, it added.
Under the D-B-F model, the RFP says firms should state the cost per kWh [and equivalent annual payment] for power delivered to Sophia, Georgetown, if the Developer executes a D-B-F contract, with all of the financing being funded by the Developer, on the condition that GOG will only take over the project and financing repayment obligations, on satisfactory completion of construction and commissioning. It adds that Financing Repayment will only start on successful takeover of the project in accordance with contract terms. Additionally, it says the Developer should state the project cost, financing details, and all other assumptions including operating costs and debt service, while terms such as interest rate, loan tenure, loan conditions, capitalization of interest during construction, and a draft financing term sheet should be provided.
The hydro project, previously pegged at US$858.1 million, had been the flagship project of the PPP/C government when it was in power pre-2015. However, then opposition A Partnership for National Unity (APNU) and the Alliance For Change (AFC) had used their joint one-seat majority to halt the project.
Once in government in 2015, the APNU+AFC coalition scrapped the project, citing costs and other concerns, while signaling that it was focusing on an energy mix with natural gas as a prime component.
A Norconsult report, which was meant to be a final study of the project and commissioned under the Guyana-Norway partnership, was generally favourable towards the venture but the APNU+AFC government interpreted it differently.
The deadline for the RFP is September 26, 2021.
The developer’s capability and credibility to execute such a project are among the stated requirements for the proposals. The RFP explains that the submissions should include a detailed track record of similar projects completed, and evidence of financial ability, including the last three years of audited financial statements.
Also required are project costs, stipulated as a lump sum, detailing all capital costs, financing costs, supervision costs, development costs, and all other costs to date of commissioning/commercial operations; and pricing details pursuant to the two models, based on 165 MW installed and expected average delivery of energy of not less than 70% of installed capacity. Actual annual delivered energy should average no less than 1,050 GWH/annum, it adds.
Prospective developers are also asked to submit details of proposed local content, including sub-contractors, percentage of project costs that will be locally sourced, and supporting details of same.
Under both options, the RFP says, developers should assume that there shall be independent supervision of the design and construction, by a reputable international third-party firm, with agreed Terms of Reference (TOR) between the parties, tendered for by the GoG, with the costs being part of the project costs borne by the developer.
Additionally, it states that under both options, there shall be provision for an international third-party operator, who will operate the facility on behalf of the project company (Option 1) or the Government (Option 2), with said operator costs being factored into the operation and maintenance costs.
The RFP notes that the project will be executed via a new Special Purpose Company (SPC) and will be issued with all previous permits, licenses, and permissions, as previously existing in April 2015, provided the developer shall have responsibility for any updates as required by law.
According to the RFP, the submissions will be used to determine a capable partner that will be selected to work with the GOG to complete the project based on the timeframes stipulated and the lowest economic costs including life-cycle costs.