Guyana in talks with Chinese owner to buy electricity from Amaila Falls Hydro Project – Jagdeo
Feb 17, 2022 -- Source - Kaieteur News Online -- https://www.kaieteurnewsonline...ydro-project-jagdeo/
Kaieteur News – By Gary Eleazar
With the incumbent administration currently pursuing the development of a 165-mega watt (MW) hydroelectric project as part of its energy matrix, Vice President Bharrat Jagdeo yesterday disclosed that his government is currently negotiating a Power Purchase Agreement (PPA) with the Chinese contractor.
The Vice President provided the update yesterday when the International Energy Conference and Expo 2022 continued at the Kingston, Georgetown Marriott Hotel.
Addressing the hundreds of delegates at the conference, Vice President Jagdeo elucidated aspects of his administration’s expanded Low Carbon Development Strategy (LCDS) and pointed to the development of the gas-to-shore initiative, the installation of solar powered projects and the hydro.
To this end, he told delegates that government is currently negotiating with the Chinese contractor, China Railway First Group, on a PPA.
This, he said, was among the crucial projects critical for Guyana’s sustainable development in future.
Cabinet in November last had approved and given its “No Objection” for the Chinese contractor, as evaluated by the National Procurement and Tender Administration Board (NPTAB).
Government had earlier in the year advertised soliciting a private partner to fund and develop the project.
The administration in inviting partners had indicated two proposals, namely a Build Own Operate Transfer (BOOT) option or a Design Build Finance option.
At the time of selecting China Railway First Group, it was noted that the BOOT option would be utilised.
PARTNERSHIPS
Addressing “Guyana’s Approach for a Sustainable Future,” the Vice President was adamant that the country’s current trajectory has to be seen in the context of its history.
With this in mind, the Vice President sought to explain that because of the three decades of undemocratic rule, prior to 1992, Guyana had slumped to being one of the poorest countries in this hemisphere with half of its population fleeing the country.
Lamenting the fact that some 80 percent of the economy had been State-controlled, Vice President Jagdeo told delegates that the indigenous Private Sector, is as a result still relatively new; “it has had just a few decades of development.”
With this in mind, he said the administration was very pleased with the way they are developing and adumbrated that through the local content legislation and other measures, government was looking to promote more partnerships between local companies and their foreign counterparts, qualifying his position saying, “it is only through partnerships the Private Sector will grow.
According to Jagdeo, it was fiscal discipline and hard work that brought Guyana to where it is today and that would be the guiding principles in future.
Recognising that the gains could quickly be slipped away, Jagdeo in addressing the matter of Guyana’s future sustainable development, sought to assure that the countries oil and gas earnings must be used in a manner that is transparent and drew reference to the recently passed Natural Resources Fund Act.
According to Vice President Jagdeo, Guyana’s oil earnings must be focused in the development of the country’s infrastructure, and to provide incentives in order to stimulate growth in the non-oil economy.
Recognising that Guyana recently approved its first National Budget to utilise oil earnings, he told delegates that the majority of the money is being used on Capital Expenditure or spending on new projects.
Regarding the recurrent expenditure, Jagdeo said, “we kept a tight constraint” and qualified the position by pointing to countries that would have splurged on recurrent spending with oil windfalls.
He told delegates, Guyana will instead focus its oil earnings going towards the development of world class education, improved access and quality of health care for all Guyanese.
According to Jagdeo, building out the infrastructure for a modern economy and to stimulate growth in the non-oil sectors are crucial to that future growth, adding, “This is important to us as we move forward.”
Adamant that the ultimate test of sustainability is how “we ensure that all of our citizens benefit regardless of geography, their race, their religion, that’s the ultimate test that all of our people have to share the benefits of our oil and gas industry and more importantly the changes that are taking place.”
To this end, Vice President Jagdeo sought to take the international community to task over what he called their prescriptive application of what sustainability is.
He qualified his position by firstly pointing out that many of the goals set by the international community are very many times done so with the developing world not at the table.
Additionally, he noted that many of the global policies run counter to the lofty goals and standards set out by the International Community and cited as example the demands of reciprocity made by the World Trade Organization on countries, such as Guyana and St. Kitts and Nevis, and argued that the latter two are unable to compete with the developed countries on the same scale.
With this in mind, Vice President Jagdeo drew reference to a number of development policies developed indigenously.
He cited as example the National Development Strategy, the Poverty Reduction Strategy, the National Competitiveness Strategy, the LCDS and the expanded LCDS.
According to Jagdeo, with the expanded LCDS, the focus has evolved from just the sustainable management of the forests but to also use the proceeds to stimulate a whole range of low carbon development and help address resilience in future and the energy mix of the future.
To this end, he outlined the objectives of the Gas-to-Shore Project which he said provides opportunities for numerous companies and that initiative is currently at the tending stage.
He said too that government will shortly also be going to tender for a 35-megawatt (MW) project and that the administration was currently negotiating the Power Purchase Agreement with the Chinese contractor for the Amaila Falls Hydro Electric Plant.
It would be apposite to note that electricity will be purchased from the power plant after which it would be transported to the Sophia substation using high voltage transmission lines.
An artist’s impression of the Amaila Falls Hydropower Project
