Chinese Company To Build Multi-Million Dollar Hydro Project In Guyana

The Guyana government says the China Railway Group Limited, which was initially selected to construct the Amaila Falls hydropower project in 2012, has now been granted approval to construct the renewable energy project.

A statement issued by the Ministry of Finance said Cabinet granted its ‘no objection’ for the Office of the Prime Minister to engage the company.

It said that the project will be built on a Build-Own-Operate-Transfer (BOOT) model where the company will supply electricity to the Guyana Power and Light (GPL) Inc. at a cost not exceeding US $0.07737 per kilowatt-hour (KWH).

On Monday, Vice President Bharrat Jagdeo told reporters that with the cabinet’s no-objection, the government would soon move into negotiations with the company.

Jagdeo said that the government will be buying the power that is generated from Amaila Falls and not the project itself. Importantly, though, the government will have oversight for the project.

“That’s not coming on our debt as government debt because we are not borrowing to do that,”  Jagdeo said, adding that the government, through the state-owned GPL, can resell the power to consumers for about  GUY$0.15 cents (One Guyana dollar=US$0.004 cents) per kilowatt-hour. Currently, consumers pay about Guy$0.30 cents per kilowatt.

The statement from the Ministry of Finance noted that the project will lower the cost of electricity needed to power Guyana’s economic diversification and transformation into a low carbon economy, as well as reduce the cost of power to the businesses and households.

The project is also expected to support initiatives such as the electrification of transport and e-mobility and accelerate the development of a robust ICT sector needed for an interconnected world as well as a competitive manufacturing sector.

This no-objection for the Chinese company follows the publication of a request for proposals by the government in various national newspapers during the period July 25 to August 15, 2021. A total of four companies submitted proposals.

According to the press release, China Railway Group Limited was identified as the “most capable partner” by the Evaluation Committee after a “rigorous” evaluation process. Subsequently, the National Procurement and Tender Administration Board (NPTAB) submitted the relevant recommendation to Cabinet for ‘no objection’.

The Amaila Falls project was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey of hydroelectric power potential in Guyana. In 2009, this project was launched as part of Guyana’s efforts to pursue a more low-carbon future, using fewer fossil fuels like the heavy oil that GPL currently provides.

The statement noted that in 2014, the government earmarked US$80 million earned by Guyana under the Guyana-Norway partnership within the Low Carbon Development Strategy (LCDS) to help finance equity in the project. But, the project was voted down in the National Assembly by the last administration and eventually, shelved despite a 2016 Norwegian study supporting its merit.

Jagdeo said that with the project now back on stream, no equity contribution from the government is needed.

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