Govt re-opens competitive bidding process for Amaila Falls Hydropower Project – VP Jagdeo

– says delay will not affect promise of cheap electricity

The Guyana Government is still committed to seeing the Amaila Falls Hydropower Project (AFHP) to fruition and will be re-opening a Request for Proposal to ensure that there is a competitive process in selecting a suitable contractor for the project.
During a recent press conference, Vice President Bharrat Jagdeo disclosed that the Government has received several direct proposals for the Amaila Falls project.
“So, when you have several proposals, the best way to evaluate is to go to a competitive process. We will have to go to that. We haven’t launched it as yet but we will have to do that,” the VP indicated.
Further, he stated that the delay in the reward of the contract for the project will not affect the Government’s promise of cheap electricity in the short term.
The 165-megawatt AFHP was the flagship initiative of the Bharrat Jagdeo-crafted Low Carbon Development Strategy (LCDS). However, the project failed to take off despite having a developer in United States-based Sithe Global, which was backed by investment major The Blackstone Inc.
In August 2013, Sithe Global announced that it was pulling out of the project, which it said was too large to continue without national consensus, and had cited the lack of consensus in Parliament. At the time, the then A Partnership for National Unity (APNU) and Alliance For Change (AFC) oppositions had both expressed concerns about the project and voted down key pieces of legislation which consequently halted the project.
Then during its term in office from 2015 to 2020, the APNU/AFC coalition Administration again shelved the project. The revival of the 165-megawatt hydropower project was one of the promises made by the People’s Progressive Party/Civic (PPP/C) in its 2020 manifesto.
Construction of the Amaila Falls project was supposed to start last year, with an expected completion date being in 2027.
The AFHP was awarded to China Railway First Group (CRFG) in November 2021, but the contract negotiations were stalled and eventually annulled after the company indicated to the Government, its inability to execute the project in keeping with the Build-Own-Operate-Transfer (BOOT) model – an arrangement that Government insists on keeping. CRFG wanted to enter into an Engineering, Procurement, and Construction (EPC) contract with the Government instead, but this was not facilitated.
At the time of that bidding process, the Government had agreed to pursue the AFHP via the BOOT model, wherein the contractor would supply electricity to the Guyana Power and Light (GPL) Inc at a cost not exceeding US$0.07737 per kWh, and wherein the company would provide the entire equity required by the project and undertake all the risks associated with the project.
According to VP Jagdeo during Thursday’s press briefing, several of the proposals received from bilateral sources are offering the same US$0.07 per kWh.
Only in July, the Vice President disclosed that at least two proposals were received from companies in Brazil to do the hydro project. He had noted too that companies out of the United States have similarly submitted proposals to take over the initiative.
During a visit to the US in December 2022, President Dr Irfaan Ali said he told Energy Secretary, Jennifer Granholm, and her team that the Amaila Falls project is open to US investors.
Meanwhile, back in October 2022, the Canadian High Commissioner to Guyana, Mark Berman, disclosed that the Canadian Commercial Corporation (CCC) had also held discussions with the Guyana Government on the Amaila Falls Hydropower Project.
Canada is well-known for its hydropower infrastructure. In fact, the clean and renewable energy supplied by hydropower accounts for over 60 per cent of all the electricity generated in Canada, and Berman has said this is an area in which Canada could provide assistance to Guyana.
AFHP is expected to deliver a steady source of clean, renewable energy, that is affordable and reliable and is envisioned to meet a significant portion of Guyana’s domestic energy needs.
This project is one of the key features in the Guyana Government’s energy mix as the country moves towards reducing its dependency on fossil fuels. The leading initiative driving this transition is the model Gas-to-Energy (GtE) project, which includes the construction of an Integrated Natural Gas Liquid (NGL) plant and a 300-megawatt (MW) combined cycle power plant at Wales, West Bank Demerara (WBD).
With these and other projects such as two mega solar power farms, the Government is hoping to meet the growing demands and enhance the national grid with cheaper electricity.
Asked on Thursday whether the delays in the Amaila Falls project will affect efforts to supply additional power in the short run, the Vice President responded in the negative.
“So, with a mix of different things [the delays with AFHP] would not affect our ability in the next several years to supply power once Wales comes on stream nor the price at which we said we want people to have,” Jagdeo stated. (G-8)