Where is Blackstone in the Hydro deal? —asks former CDB Project Manager
October 9, 2011 | By KNews | Filed Under News
Source - Kaieteur News
President Bharrat Jagdeo
Blackstone, the majority shareholder in Sithe Global, which has been tasked with developing the Amaila Falls Hydro Project, has so far been silent, and a former Project Manager of the Caribbean Development Bank (CDB) wonders what implications this could have for the financial closure.
In December 2010 Blackstone increased their interest in Sithe Global to 99 percent, but so far there has been no word from the company.
“Blackstone hasn’t said anything,” said Charles Sohan, former project manager with the CDB.
“Sithe Global is small; it is not a major part of Blackstone group. If you look at the annual reporting of Blackstone group, you don’t see cite as a big investor.”
But there are other difficulties Sohan has with the project.
He said that China Railways was named the contractor to build the hydro station without a cost yet being attached.
“First of all you cannot award a contract unless you know what the project is going to cost you. So they haven’t finalized the financing and where it is going to come from.”
Further, Sohan said that there is no information about the design specifications for the project.
“That we don’t know and you’re awarding a contract?” Sohan asked.
The government last week linked the bloating cost of the Amaila Falls Hydro Project to added interest costs and price hikes for materials that would be used in the construction, and said it was not ruling out pushing more money into the project.
The proposed Amaila Falls Hydro project
President Bharrat Jagdeo stated that the project could end up costing US$835M. This amounts to more than US$200M in excess of the cost that the developers, Sithe Global, had indicated earlier this year. In fact, the new price tag cited by the President is more than US$300 more than the cost cited by the state-owned Guyana Chronicle earlier this year.
On October 8, 2009, Prime Minister, Samuel Hinds, signed for the original developers of the project – Synergy Holdings – to transfer its 13-year-old interim licence to Sithe Global for the development of the Hydro Project.
Head of NICIL Winston Brassington
The Project will be financed through debt from the China Development Bank as per an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global and the Guyana Government.
Sithe Global expects to ultimately contribute around US$200 million of equity.
The Guyana Government has said that it will use funds from the US$250 million forest-saving deal with Norway to invest in the project. None of the funds under that deal has yet reached Guyana.
However, the Head of the President Secretariat Dr Roger Luncheon yesterday did not rule out that the government could be prepared to raise the amount of funds it commits to the project given its importance to the government.
Makeshwar Fip Motilall
The Amaila Hydropower Project is a planned hydroelectric project (approximately 165MW capacity) to be located in western Guyana.
The project also includes a new 270 km transmission line and new substations near Georgetown.
Currently, nearly all electric generation in Guyana is provided through small units burning either diesel or heavy fuel oil.
Less than six months after Synergy Holdings under Fip Motilall realised it could no longer develop the Amaila Falls Hydro Project and agreed to have the licence granted to Sithe Global (October, 2009), Government awarded him a US$15.4 million contract to build roads and bridges leading to the project site.
October 9, 2011 | By KNews | Filed Under News
Source - Kaieteur News
President Bharrat JagdeoBlackstone, the majority shareholder in Sithe Global, which has been tasked with developing the Amaila Falls Hydro Project, has so far been silent, and a former Project Manager of the Caribbean Development Bank (CDB) wonders what implications this could have for the financial closure.
In December 2010 Blackstone increased their interest in Sithe Global to 99 percent, but so far there has been no word from the company.
“Blackstone hasn’t said anything,” said Charles Sohan, former project manager with the CDB.
“Sithe Global is small; it is not a major part of Blackstone group. If you look at the annual reporting of Blackstone group, you don’t see cite as a big investor.”
But there are other difficulties Sohan has with the project.
He said that China Railways was named the contractor to build the hydro station without a cost yet being attached.
“First of all you cannot award a contract unless you know what the project is going to cost you. So they haven’t finalized the financing and where it is going to come from.”
Further, Sohan said that there is no information about the design specifications for the project.
“That we don’t know and you’re awarding a contract?” Sohan asked.
The government last week linked the bloating cost of the Amaila Falls Hydro Project to added interest costs and price hikes for materials that would be used in the construction, and said it was not ruling out pushing more money into the project.
The proposed Amaila Falls Hydro projectPresident Bharrat Jagdeo stated that the project could end up costing US$835M. This amounts to more than US$200M in excess of the cost that the developers, Sithe Global, had indicated earlier this year. In fact, the new price tag cited by the President is more than US$300 more than the cost cited by the state-owned Guyana Chronicle earlier this year.
On October 8, 2009, Prime Minister, Samuel Hinds, signed for the original developers of the project – Synergy Holdings – to transfer its 13-year-old interim licence to Sithe Global for the development of the Hydro Project.
Head of NICIL Winston BrassingtonThe Project will be financed through debt from the China Development Bank as per an agreed upon funding schedule over the course of the construction period, and equity from Sithe Global and the Guyana Government.
Sithe Global expects to ultimately contribute around US$200 million of equity.
The Guyana Government has said that it will use funds from the US$250 million forest-saving deal with Norway to invest in the project. None of the funds under that deal has yet reached Guyana.
However, the Head of the President Secretariat Dr Roger Luncheon yesterday did not rule out that the government could be prepared to raise the amount of funds it commits to the project given its importance to the government.
Makeshwar Fip MotilallThe Amaila Hydropower Project is a planned hydroelectric project (approximately 165MW capacity) to be located in western Guyana.
The project also includes a new 270 km transmission line and new substations near Georgetown.
Currently, nearly all electric generation in Guyana is provided through small units burning either diesel or heavy fuel oil.
Less than six months after Synergy Holdings under Fip Motilall realised it could no longer develop the Amaila Falls Hydro Project and agreed to have the licence granted to Sithe Global (October, 2009), Government awarded him a US$15.4 million contract to build roads and bridges leading to the project site.