Monday, August 15, 2022

Guyana’s major hydropower project delayed, but Gas-to-Energy still on track

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Guyana’s Vice President Dr. Bharrat Jagdeo said the government will “definitely have to revise timelines” for the delivery of its major hydropower project at the remote Amaila Falls. After six months of negotiations with the contractor, China Railway Group Limited (CRGL), no consensus could be reached on the financial model for the project.

In 2020, Prime Minister, retired Brigadier Mark Phillips had placed the cost of the project at US$840 million, according to the government’s information arm. Inflation could push the cost higher.

Guyana may retender for the project, since the company informed the government that it has been unable to source financing under the initially agreed to Build-Own-Operate-Transfer (BOOT) model. Dr. Jagdeo said the company is instead proposing the Engineering, Procurement and Construction (EPC) model, where government is the sole financier.

The Vice President indicated that this is not an option.

“We are still trying to get them to meet the commitment that they bid for [and] if we cannot change that, if we cannot get it done under the BOOT, then we cannot proceed with the company,” he told a press conference on Monday.

CRGL had been given the no-objection back in November 2021. The touted date for the project to be realised was 2027. The new timeline will not be known until the government secures a deal.

This is not the first time Amaila has been pushed back. In August last year, President Dr. Mohamed Irfaan Ali had promised to deliver 500 megawatts (MW) of new power by 2025, including Amaila. Subsequent public statements by government officials moved the expected year of commissioning to 2027.

The Amaila Falls Hydropower project has been in the pipeline for years and is expected to help to lower the cost of electricity. But this project’s delay will not stop the government from delivering on this promise.

“That will not affect our commitment to drop the price by 50% because the commitment was on the basis of the power supply from the gas to energy,” Dr. Jagdeo said.

The project is on track to be delivered in 2025, with construction set to begin on all components later this year. The project will deliver 250 MW to the grid, and by itself, will bring major economic benefits for Guyana.

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