Last Updated on Monday, 1 November 2021, 22:05 by Denis Chabrol
The Guyana government has identified China Railway Group Limited to open negotiations to build the Amaila Falls Hydropower project and sell electricity to Guyana Power and Light for 7 US cents per kilowatt hour, the Finance Ministry announced on Monday.
The actual cost to build the power plant is not yet known, but government said that all it would be doing is buying the electricity for GPL to resell at 15 US cents per kilowatt hour.
Under the Build-Own-Operate-Transfer (BOOT) model, the Finance Ministry said China Railway Group “will provide the entire equity required by the project and undertake all the risks associated with the project.”
Government said that overall this deal is even better than the previous one. “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.”
In response to government’s request for proposals during July 25 to August 15, 2021, four companies submitted proposals, and China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee 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 AFHP was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey of hydroelectric power potential in Guyana.
After the project had been cancelled by the David Granger-led administration, the 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 had been held in escrow.
Vice President Bharrat Jagdeo on Monday said that money would be used to establish solar farms and along with the hydropower plant and the gas-to-shore project, would be part of Guyana’s de-carbonisation plan.
Government said the hydropower project will also support initiatives such as the electrification of transport and e-mobility, and accelerate the development of a robust Information Communications Technology (ICT) sector needed for an interconnected world as well as a competitive manufacturing sector.