With the highly-anticipated Amaila Falls Hydropower Project (AFHP) expected to get underway later this year, the People’s Progressive Party/Civic (PPP/C) Government has committed to hiring international experts to both oversee and manage the project.
This was revealed by Petroleum Economist at the Natural Resources Ministry, Winston Brassington, during an update on the AFHP on Thursday at Guyana’s inaugural International Energy Conference and Expo, which ends today.
Brassington told stakeholders that more than a decade since its conceptualisation, the transformational 165-megawatt (MW) project was very close to becoming a reality.
“We’re currently engaged with China Rail in negotiations for this project to start by the third quarter of this year. Under the new structure, we have much better terms than we did in 2015,” he stated.
Last November, Cabinet gave its ‘no objection’ for China Railway Group Limited to construct the Hydropower Project on a Build-Own-Operate-Transfer (BOOT) model to the tune of US$700 million, which is lower than the cost estimated in 2015.
According to Brassington, the developer will be undertaking all of the risks from this venture in addition to financing it.
“The Government is not making any financial commitments. So, there is no money from the IDB (Inter-American Development Bank) and there is no money from Norway for this project. This project is being financed by China Rail,” he emphasised.
The previous PPP/C Government was planning to use revenues Guyana had earned from its 2009 deal with Norway to fund the project. That five-year pact, which was not renewed by the A Partnership for National Unity/Alliance For Change (APNU/AFC) regime, saw Guyana earning US$250 million for maintaining its forest cover at a high level in order to offset global carbon emissions.
Nevertheless, the Amaila Falls Project is slated to come online in 2026, with construction lasting for some three and a half years.
Brassington reassured that Government would ensure world-class supervision during the construction stage as well as international experts to operate and maintain it.
“We will have independent supervision which will be internationally tendered to review the work that had been done. So, we will hire, through public tender, world-class international project supervision firm to ensure that what is being designed and built is built to those standards. We also agreed that we will have an international O&M (Operations and Maintenance) operator so when it’s built, we will have someone who would be competent to operate this [project],” he stated.
However, while the aim is to have construction start later this year, a Power Purchase Agreement (PPA) is currently being negotiated for Guyana to benefit from the hydropower before those works start.
“GPL (Guyana Power and Light) will be the off-taker. So, GPL will buy all of the power under a Power Purchase Agreement and secure its payment with a receivables agreement,” he stated.
The agreement is for the company to supply electricity to GPL at a cost not exceeding US$0.07737 per kWh.
Moreover, in addition to the hydro plant and all the related technical and physical works, the scope of project also includes a 270-kilometre double circuit, 230-kiloVolt transmission line running from Amaila Falls all the way to GPL’s Central Substation at Sophia, Greater Georgetown. This, according to Brassington, covers GPL’s entire transmission system which is just over 200 kilometres.
“So, this is a project scope that covers everything to get the project into our load centre,” he said.
Additionally, the project includes the cost of upgrading the roads and bridges leading to and from Amaila.
The AFHP was a brainchild of the previous PPP/C Administration and was the flagship project under its Low Carbon Development Strategy (LCDS), which has since been revised to meet a 2030 timeline. However, the project was shelved by the APNU/AFC coalition shortly after its took office in 2015, citing the lack of investors.
PPP/C had contended that the 165-megawatt project could have already been generating about 50 per cent more electricity than the entire current GPL supply of 120 megawatts to the grid.
The now governing party had promised on the 2020 elections campaign trail to revive the project to boost the country’s capacity and as part of its transition to clean energy sources.
Meanwhile, as part of its energy-mix towards more clean and renewable energy sources, the Government is also forging ahead with its gas-to-shore project which will generate close to 200 megawatts.
Together, these two mega projects as well as other renewables such as solar and wind will reduce the high cost of electricity as well as the country’s importation of fossil fuels.
