Norway keeps US$80M for Amaila …but funds could be diverted if project not viable

Norway is keeping US$80 million of funding from its forest-saving deal with Guyana for the
Amaila Falls Hydro Project, but the funds could be diverted to other clean energy initiatives if the project is deemed impractical, Finance Minister Winston Jordan said
Tuesday.

The two parties also face a tough deadline to determine the use of the funds; if a decision is not made by June next year, the funds would go back to Norway, Jordan admitted. Jordan and some members of the Guyanese delegation first met with the Norwegian Minister of the Environment Tine Sundtof and later Raphael Trotman, Minister with responsibility for natural resources and the environment, Minister Jordan and members of the Guyana delegation met with Andreas Tveteraas, Deputy Director of Norway’s Climate and Forest Initiative.

The governments of Guyana and Norway have agreed that a “once and for all” study should be done to determine the feasibility of the Amaila Falls Hydro Project. Norway will decide if it will ask the Inter-American Development Bank (IDB) to conduct the study or choose another independent contractor. The IDB’s representative in Guyana Sophie Makonnen was also at Tuesday’s meeting, held at Le Bourget conference centre on the outskirts of Paris where the UN Climate Conference is ongoing.
“Our position remains the same, in its current conceptualisation we can’t go with it,”

Minister Winston Jordan, Guyana’s Permanent Representative to the UN Ambassador George Talbot, Minister Raphael Trotman, in discussion with Teresa Gaime, a technical assistant attached to the Department of Natural Resources and the Environment following Tuesday’s meeting between Guyana and Norway.

Minister Jordan said of the Amaila Falls Hydro Project after the meeting.

He said the project as conceptualised is too costly, “We think it (was) not properly studied; we think it has engineering and environmental issues.” Jordan said that both sides agreed on the study. “We welcome it so as far as that it will bring some finality to the issues that have been swirling over the project, once and for all.”
If the project is deemed viable, then Jordan said the government will have to seek a sponsor; and if it is not deemed feasible, then the two sides will have to decide on what will happen with the US$80 million Norway had committed to the Amaila Falls project.

Given the June deadline when the funds would have had to be directed, Minister Jordan said the two sides agreed that whatever work needs to be done to determine the feasibility of the project has to be done by then.

In August 2013, the developer of the project, Sithe Global, pulled out, saying its development funds hinged on support from all political forces. The current coalition government then made up of APNU and AFC as separate opposition parties, refused to support the project in the form it was presented, saying it would put the country under
a severe debt burden and that there was no guarantee that power from Amaila would have been cheaper for Guyanese. In addition to equity financing, Amaila’s cost, which kept increasing, would have come from loans from the Inter-American Development Bank and the China Development Bank.

The Amaila Falls Hydro Project was designed as a 165-megawatt facility, which would have delivered its power to consumers via power lines running through the jungle and onto various distribution points along the coast and other areas. In preparing for the project, the former government spent over $US30 million to build a road to Amaila Falls. Originally it was contracted at US$15 million to Florida puja
shop owner Fip Motilall, but despite vehement protests, the then Bharrat Jagdeo administration pressed ahead with Motilall. The contractor was fired in January 2012,soon after Donald Ramotar became president. The road contract was then handed out in
parcels to various contractors. Minister Jordan said that with the money already spenton the project, uses have to be found for it, if the Amaila Falls project has to be abandoned. “It cannot be abandoned; there will have to be options.”

Only recently government announced that five out of 67 possible sites are currently being assessed by the IDB for development of hydropower. The assessment is expected to be completed by May 2016. Minister of Public Infrastructure David Patterson said the five sites are Kamira, Kumu, Tumatumari, Tiger Hill and Amaila. The government will be using $80M from the Norway funds that were set aside for renewable energy development.

“At the end of this process, we will obviously assess them, however we will look to use the $80M in the most acceptable means of renewable energy … but it could be any form of large scale renewable energy – which is the understanding that we have so it’s a process which we are going through, and I think it’s a wise way to go forward,” Minister Patterson stated.

The Guyana Government is also working with the Government of Brazil and other interested stakeholders in seeking additional funding for the hydro power/renewable energy project.
“We are moving ahead, and we are working through the Ministry of Foreign Affairs continuing discussions with them. There are other individuals who have MOUs. I think Kumu
falls, there is a company that has an MOU with us and it remains to develop that falls,Tumatumari, Moco Moco – we are going out for an expression of interest to resuscitate the Moco Moco hydro falls so we haven’t excluded any project. It’s always a question of time and cost,” the minister explained.

Renewable energy has been identified as a growth industry and Guyana has an abundance of wind, sun and water. Harnessing their potential would be a game changer for Guyana as it is believed that the country has enough capacity to not only satisfy its own energy
demands, but to sell excess to its neighbours.

By Neil Marks in Paris