AG Report 2021: Almost $500M spent on energy diversification, grid improvement programme last year

Almost $500 million in funds sourced from the Inter-American Development Bank (IDB) was spent last year on the Energy Matrix Diversification Programme, which, among other things, aims to improve the stability of the Demerara Berbice Interconnected System (DBIS).
The Auditor General, in his 2021 Report, made reference to the programme, which is being funded by an IDB loan. Specifically, it was noted that the IDB had agreed to lend US$21.1 million to the programme.
It is a programme that is being jointly executed by the Guyana Power and Light (GPL) and the Guyana Energy Agency (GEA). A sum of $750 million was allocated for the programme, but $482.1 million was expended last year. The AG Report notes that $267.8 million was not spent in 2021, owing to the late arrival of equipment and materials.
“The GPL will execute and implement Component Two – Reinforcement of Transmission Infrastructure and Component Four – sub-components being management and contingencies in the total sum of US$6.637 million.”
“The Guyana Energy Agency will implement Component One – Renewable Energy Solutions for the Hinterland Programme and Component Three – Institutional Strengthening and Governance of the Energy Sector,” the AG said in the report, adding that project costs would be split by both agencies.
An agreement for the project was entered into in 2019. It encompasses investments in sustainable and cleaner energy solutions to diversify the energy matrix in the hinterland while contributing to climate change mitigation.
Additionally, money will be invested in reinforcing transmission infrastructure to improve the reliability and stability of the DBIS, the grid providing power throughout the applicable administrative regions.
The project, which has a duration of four years and will have a final cost of US$25.1 million, is also geared at strengthening the Department of Energy to develop a regulatory framework and improve institutional capacity and governance of the oil and gas sector. According to the AG, GPL will be contributing counterpart resources of US$3.9 million towards the project.
With the Christmas season beckoning, all eyes will be on GPL as it seeks to deliver power during the peak season. The diversification of Guyana’s energy sources is also important in the context of climate change. Guyana is currently aiming to reduce its carbon emissions by 70 per cent in 2030 through a progressively cleaner energy mix.
The previous target of 100 per cent renewable energy by 2025, which was set by then President David Granger during a visit to Paris in 2016, has been derided by the current Government as a wholly unrealistic target. Indeed, back in 2018, the Office of Climate Change (OCC) had admitted that Granger’s target was not achievable and would have to be reviewed.
In September, it was announced that funding had been secured by Guyana from the Islamic Development Bank (IsDB) for renewable energy projects. The GEA had said the funding was for the cost of the “Small Hydropower Project”, and some of that money would go towards consultancy services.
In fact, the GEA started tendering for consultants, issuing a notice inviting bids from firms for “Design Review and Construction Supervision of two hydropower plants”. One project entailed the construction of a new 0.5-megawatt (MW) hydropower plant at Kumu in the Rupununi and the other, the rehabilitation and upgrade of the Moco hydropower facility, to 0.7 MW. (G3)