October 1 ,2021
The Amaila Falls
Four companies – three Chinese and one Brazilian – have responded to government’s Request For Proposals (RFPs) for the resuscitation of the Amaila Falls Hydropower Project (AFHP), which is expected to begin construction by the middle of next year.
Government wants the project to be completed and commissioned by the end of 2025.
The proposals were yesterday submitted to the National Procurement and Tender Administration Board. The three Chinese companies are China Rail-way Group Limited, Sinohydro Corporation Limited and China Gez-houba Group Company Limited. All of the companies submitted an original copy of their proposals along with two flash drives with the information, as specified in the RFP document.
The Brazilian firm is Rialma S.A (Groupo Rialma), a company which operates in the energy, agricultural and mining sector and boasts of clean energy initiatives and says it specialises in “small hydroelectric power plants no more than 30 MW.
“In the energy area, it operates in the generation, transmission and sale of energy. It stands out in the market for the constant optimization of the projects developed, working on the conception, feasibility, implementation and operation of electric generation plants using clean and renewable sources (wind and water),” its online profile states.
Over the years, it has specialised in the construction and operation of Small Hydroelectric Power Plants (PCHs), plants with low environmental impact with an installed capacity of less than or equal to 30 MW. The Group carried out the construction of the Santa Edwiges II SHP, with 13 MW of installed capacity, which was the first private SHP to enter into commercial operation in the State of Goiás, in January 2006. It currently has 68 MW in operation, from four SHPs located in the State of Goiás.
In 2011, it diversified its portfolio with the objective of setting up wind farms in the Northeast region of Brazil. Since then, it has been carrying out wind measurements in several states and planning to install more than “2,000 MW of wind energy in the next 10 years,” the profile adds.
Minister within the Office of the Prime Minis-ter Kwame McCoy said that the submissions will now be evaluated and a decision based on which one is most feasible. He also noted that tomorrow the Prime Minister’s Office will also issue press release.
“The four proposals have been received today. What happens next is, they will be evaluated against the criteria set out for the project. Out of the evaluation, a preferred party will be chosen to then execute the project which will be done under the BOOT (Build, Own, Operate, and Transfer) model,” McCoy explained.
Government had 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.
It was explained that the call for the RFPs was due to the fact that the Guyana Power and Light’s current Development and Expan-sion (D&E) Plan for 2021 to 2025 projects that the total capacity required in 2025 would be 465 MW and energy of 2,900 GWH.
Energy mix
“The GOG proposes an energy mix that will utilize both natural gas, Heavy Fuel Oil, and renewables (hydro, wind, solar). In 2026, government 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.”
According to the RFP, the Summary of Scope of Works entails a 165 MW installed hydro dam, plant, and related works; Trans-mission Line and Struc-tures: 270 KM double-circuit 230 KV from Amaila to Sophia; 230 KV Substations in Linden and Sophia; Creation of a 23 square kilometre storage reservoir; upgrades and completion of roads and bridges to the site (85 kilometres new; 122 kilometres existing); and assumption of all geo-technical risks including guarantees relating to the structure of the reservoir, dam, and transmission towers.
Under the BOOT model, it asked 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 rates, loan tenure, loan conditions, capitalisation 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 combined one-seat majority to halt the project.
Although then Opposition Leader and current Vice President Bharrat Jagdeo had pleaded with the APNU+AFC government, when it took office in 2015, to continue a conversation on the project and ensure that it was restarted, Minister of State Joseph Harmon made an announcement in October of 2017 that the project had been canned. He had told this newspaper in an exclusive interview that his government 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.
