US company pulls out of Amaila Falls hydro project- Brassington

Last Updated on Saturday, 26 December 2015, 21:01 by GxMedia

Two days after Guyana’s National Assembly failed to reach consensus on key-related legislative arrangements to support the more than US$800 million Amaila Falls Hydropower Project, a key American investor has pulled out.

Head of the National Industrial Commercial Investments Limited (NICIL), Winston Brassington said the New York-based Sithe Global has formally advised the government of its decision.

“I feel a deep sense of loss,” he said, adding that Guyana’s investment climate has suffered severe damage. Brassington, who was a key negotiator for the deal, said Sithe Global has already closed its Guyana offices after investing at least U$16 million on preparatory work for the project.

“It sends a shock to anyone else who is looking to contemplate investing in Guyana. Investor confidence is very much affected by this,” he said.

President Donald Ramotar, however, held out a glimmer of hope in brief remarks to state media operatives at State House, his official residence on Main Street. Ramotar said he was ready to hold further talks with the opposition to save the project.

Sithe Global declined to say whether it has decided to pull out of the project until Sunday but at the same time insisted that all political parties should support the project before its continued involvement. “In the meantime, our position remains unchanged.  A public-private partnership of this magnitude requires a national consensus in order for us to proceed further,” Sithe Global told Demerara Waves Online News (www.demwaves.com).

While the Alliance For Change (AFC) last Wednesday voted in favour of increasing the debt ceiling from GUY $1B to GUY$50 billion, government had hoped for a GUY$130 billion ceiling. The AFC has said that it would review its position in another three months depending on an assessment by the Inter American Development Bank (IDB). A Partnership for National Unity (APNU) has opposed an increase in the debt ceiling that would guarantee payments to Amaila Falls Hydropower Inc (AFHI) should the Guyana Power and Light (GPL) find itself hamstrung to buy the power.

“At this point, there is no other investor. Amaila is dead as it’s structured,” said Brassington who lamented APNU’s no-vote twice on July 18 and August 7.

Sithe Global officials flew into Guyana two weeks ago in the hope of persuading the opposition to vote in favour of the project.

The Guyana government has spent more than US$12 million to build a road to access the hydropower site.

The government has said that based on an estimated 20 percent reduction in electricity tariff from the start of Amaila’s operation residential consumers save approximately $208.7 million monthly or $2.5 billion annually.