Proceeding with the construction of the almost US$1 billion Amaila Falls Hydropower Station would be “downright criminal” because of the financial burden on the Guyana Power and Light (GPL) and the Treasury, Finance Minister Winston Jordan said.
He said in his 2015 National Budget presentation said under the current financial formula, GPL would be required to pay GUY$130 million to the power station operators, which would amount to GUY$2.6 billion over the duration of the power purchase agreement.
He said that does not include US$45 million spent on the construction of a road to the site of the hydropower station, US$80 million in equity and a US$35 million loan from the Inter American Development Bank (IDB).
“It will be delusion to suggest that GPL has the competence to handle such a financial burden,” he said.
The Finance Minister noted that GPL is saddled with high energy and technical losses and consumers would have to pay higher tariffs while the Treasury would be burdened by financial guarantees.
He said IDB experts have also found that the cost of Amaila Hydropower would be too high.
Instead, he said government would be focusing on the establishment energy farms that would be fuelled from fossil fuelled, wind, solar and hydro in Mazaruni with Brazil over the next five years. Other communities expected to benefit from renewable energy are Kato, Moco Moco, Tumatumari and Bartica.