China Railway Group to construct major hydropower project in Guyana

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China Railway Group Limited is set to construct the Amaila Falls Hydropower Project (AFHP) in Guyana after being granted a “no objection” by Cabinet. This was disclosed by Guyana’s Ministry of Finance on Monday evening.

The ministry noted that China Railway will be constructing the AFHP based 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 KWH.

The Chinese company is also set to provide “the entire equity required by the project and undertake all the risks associated with the project,” according to the finance ministry.

Cabinet’s decision follows the request for proposals made by the government back in July.

Approximately four companies submitted proposals, and according to the ministry, China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee. This was after a rigorous evaluation process, following which the National Procurement and Tender Administration Board (NPTAB) submitted the relevant recommendation to Cabinet for ‘no objection’.

The Amaila Falls Project has been in the pipeline for years and is expected help to 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 businesses and households.

The press release detailed too that the hydropower project will 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. It is also poised to make the manufacturing sector more competitive.

The ministry said in its current formulation, it is expected that the project will require no equity contribution from government, in comparison with the previous project structure which was based on a government contribution of US$100 million.

Additionally, the current structure anticipates a cost of power that will be lower than the initial cost of 11 cents per KWH contemplated by the previous project structure.

The AFHP was first identified in 1976 by the Canadian company ‘Monenco’ during an extensive survey of hydroelectric power potential in Guyana with various studies supporting it.

Guyanese authorities in 2013 had earmarked US$80 million earned by the country under the Guyana-Norway partnership within the Low Carbon Development Strategy (LCDS) to help finance equity in the project.


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