Govt made over $10B in capital investments in GPL since 2020

…water subsidies cost $250M annually, over 29,000 pensioners benefiting

The Government has, between 2020 and 2023, made over $10 billion in capital investments in the Guyana Power and Light (GPL), as part of its measures to absorb the high cost of power and prevent it from being passed down to consumers.
A Partnership for National Unity (APNU) Member of Parliament Annette Ferguson had submitted to the National Assembly written questions addressed to Senior Minister in the Office of the President, with responsibility for finance, Dr. Ashni Singh. The first question requested a disaggregated regional list of the number of pensioners benefitting from water and electricity subsidies as of May 2023. Additionally, the Parliamentarian requested the total cost per month on the treasury.

In his written response, the Finance Minister revealed that a total of 29,923 pensioners benefitted from water subsidies as of May 2023. This number includes 1,978 in Region Two (Pomeroon-Supenaam); 5,217 in Region Three (Essequibo Islands-West Demerara); 13,238 in Region Four (Demerara-Mahaica); 2,939 in Region Five (Mahaica-Berbice); 4,708 in Region Six (East Berbice-Corentyne); 300 in Region Seven (Cuyuni-Mazaruni); 13 in Region Nine (Upper Takutu-Upper Essequibo) and 1,530 in Region 10 (Upper Demerara-Upper Berbice).
“In the case of the water subsidy, the total cost to the treasury for the month of May 2023 was $21 million. The total cost of this initiative is estimated at $250 million per annum,” the Finance Minister explained.
When it comes to electricity subsidies, Dr Singh explained, over $10 billion has been invested by the PPP/C Government in GPL from 2020 to 2023 – an amount that is necessary to allow Government to continue subsidizing the cost of electricity not only to pensioners, but to the entire country.

“It should be noted (that) the PPP/C Government has been continuously absorbing the impact of high fuel prices on the cost of services provided by electricity companies, thereby ensuring that it does not translate into high electricity bills to all customers. To this end, Government has made over $10 billion in capital investment in the Guyana Power and Light Inc. over the period 2020 to 2023,” Dr Singh said.
Meanwhile, the Finance Minister also reminded Ferguson that it was the former APNU/AFC Government in 2015 that removed electricity and water subsidies from pensioners. By removing that safety net, Dr Singh pointed out, APNU/AFC’s actions foisted over $500 million in costs on vulnerable pensioners.
“It would be recalled that in 2015, the then APNU/AFC Government callously removed the electricity and water subsidies from pensioners, thereby reducing the disposable income of this vulnerable section of our society. This unconscionable act resulted in the loss of over $200 million in water subsidy and $350 million in electricity subsidy to our pensioners annually,” Dr. Singh explained.

Renewable energy
One of the motivations behind Government’s pursuit of renewable energy projects and the Gas-to-Energy project is reducing the heavy fuel oil (HFO) cost on the state coffers, thereby freeing up resources that can be invested in other areas.
In fact, earlier this year, Minister of Natural Resources, Vickram Bharrat, had said that when the gas-to-energy project comes online, Guyana is expected to save between US$150 million and US$200 million in foreign currency that would have otherwise covered the country’s fuel import bill.
In Budget 2023, the gas-to-energy project received a $43.3 billion allocation. This allocation is in addition to the $24.6 billion injected into the start-up of the transformational project, which includes construction of an integrated Natural Gas Liquid (NGL) Plant and the 300-megawatt (MW) Combined Cycle Power Plant at Wales, WBD.
The NGL and 300MW power plant components of the gas-to-shore project are, meanwhile, expected to cost US$759.8 million, and will be financed through sources that include budgets and loan financing.
Meanwhile, the Amaila Falls Hydropower Project (AFHP), which was revived by the PPP/C Government when it returned to office in 2020, will supply electricity to GPL Inc at a cost not exceeding US$0.07737 per kWh, once it comes online.
In October, the Government had reinvited Requests for Proposals (RFP) under a Build-Own-Operate-Transfer (BOOT) model, to advance the development of the AFHP. The BOOT model is one wherein the company undertaking the project would provide the entire equity required and undertake all the risks associated with the project.
The revival of the 165-megawatt AFHP was one of the promises made by the People’s Progressive Party/Civic in its manifesto. The project was initiated under the previous PPP/C Administration, but was scrapped by the coalition Administration which had controlled the National Assembly by a one-seat Opposition majority.
The AFHP was the flagship of Guyana’s Low Carbon Development Strategy (LCDS).
Amaila was expected to deliver a steady source of clean, renewable energy that would have been affordable and reliable, and was envisioned to meet approximately 90 per cent of Guyana’s domestic energy needs while removing dependency on fossil fuels. (G3)