Final leg of IDB/GPL agreement to commence 2017

The Guyana Power and Light (GPL) is seeking to have the last part of its agreement with the Inter-American Development Bank (IDB) commence by January next year.

The loss reduction component said to be the largest part of the programme, has already passed the bidding process and is now awaiting signing and execution.

GPL’s Chief Executive Officer (ag), Renford Homer, speaking to journalists at a press conference earlier this week, said the loss reduction process will be at the top of the company’s agenda in the new year. The third component of the Power Utility Upgrade Programme (PUUP) set to begin in 2017, deals with addressing loss reduction and improving electricity supply distribution.

“There has been a preferred bidder that was approved by Cabinet and the Inter-American Development Bank (IDB)….so it’s just a matter of signing and consummating that contract, so we do expect to see them (contractors) on the ground in the first quarter of 2017,” Homer explained.

The acting CEO further explained that GPL will be using its consolidated fund along with funding from the PUUP to effectively target loss reduction.

“Prior to the granting of the funding for the PUUP programme, the IDB has funded other studies with respect to losses within the GPL system. The design of the programme is such that it is meant to deliver at the end of the programme in 2020, a sustained reduction of losses of five per cent so we expect to see losses reduced to approximately 23.8 per cent in 2020.”

The IDB had back in 2014, approved loans totalling US$37.6 million along with non-reimbursable investment financing from the European Union to help boost the efficiency and reliability of Guyana’s power system.

IDB had said the project would be done through electricity loss reduction measures, improvements in the operational capabilities, and strengthening the management and corporate performance of GPL.

“Reducing overall electricity losses can improve GPL’s financial performance, while alleviating the Government’s fiscal commitments with regards to the energy sector,” the IDB stated.

“Guyana is expecting a significant increase in electricity consumption during the next decade as a result of the growth of its residential and commercial sectors, and the expected return of large customers to the national power grid,” an IDB statement added.

According the IDB, GPL is now facing various challenges in trying to provide additional electricity on an ‘efficient and reliable basis’, which include high levels of electricity losses. “As Guyana’s energy demand increases, the distribution infrastructure will experience greater stresses, and in turn, this will challenge GPL’s management and its ability to manage electricity supply,” it said.

The programme seeks to rehabilitate about 830 kilometres of GPL’s distribution network by implementing an “integral approach to tackle overall losses while strengthening GPL’s management and technical capabilities.”

Under the IDB’s Grant Leverage Mechanism, the Guyana PUUP will be the first to be co-financed with IDB resources and those to be provided on a non-reimbursable basis by the EU’s Caribbean Investment Facility.