GPL needs Amaila Falls Project, not US$110M – MP Ali

– says long-term sustainability needed in energy sector

Instead of pumping more finances into fixing the plethora of issues at the Guyana Power and Light (GPL) Inc, Government should instead seek to invest in building a cleaner and more efficient energy system that will trickle down to the benefit of consumers, which will have a long lasting effect.
And while it is doing this, a more strategic and robust programme could be worked out to reduce its burdensome technical and non-technical losses.
This is the firm view of former Government Minister and Opposition Member of Parliament (MP) Irfaan Ali who said the matter involving GPL now seeking US$110 million to assist with an overhaul of their system, points to the bad decision made by Government to abandon the Amaila Falls Hydro Project.
“The Amaila Falls Hydro Project was a long-term solution to our energy requirement in a sustainable and cost-effective manner. By today we would have

been enjoying power from Amaila Falls, we would have been enjoying it at much less or far less the cost that consumers are paying today,” he opined.
However, Ali said the coalition Government abandoned that very project without any plans as to how they will sustain the energy climate for the country. The former Minister said the main objective right now should be to looking at a long-term solution to the country’s energy problem, to ensure that energy is also generated in a sustainable, cost-effective manner and one that will bring benefit to the consumer.
“Pumping money into GPL will not allow it, but the Government should therefore rethink its strategy and rethink its position on the Amaila Falls Hydro Project… Any investment should be able to equip us of our capability for energy to be generated in a sustainable way,” he opined.
One of the greatest challenges facing this sector is the growing demand on the system. However, the current capacity has not grown to meet that demand. “They’ve also seen a retrograde in terms of reliability of power and if you look at for example what is going on with blackouts and so on, it is far worse today than when we had the contract with Wärtsillä,” he added.
The Government had moved away from the Wärtsillä support mechanism with the promise that black out will be a thing of the past and the system would have been far more efficient. However, the Opposition MP pointed out that the system today is far more inefficient and a lot of maintenance is due. Also, the cost of energy has not gone down and the supply cannot meet the demand.
Importantly also, Ali said based on the marked reduction in fuel between 2014 and 2016, this could have resulted in a surplus position of GPL. He said if this is the case, the power company needs to say how much that surplus was for each year and what they did with the surplus. “Because when the price for fuel came down there was no adjustment to the cost of electricity to the consumer,” he recalled.
The Opposition has long called for the reintroduction of the Amaila Falls Hydro Project for a number of important reasons. Opposition Leader Bharrat Jagdeo said not only does the scrapping of the project threaten the forest pact agreement with the Kingdom of Norway, which could cause the country to lose out on another US$3 billion in savings, but it could assist Guyana to combat climate change.
The project, which formed part of Guyana’s Low Carbon Development Strategy (LCDS), was the brainchild of Jagdeo, and was commissioned in 2009. And having taken up office in 2015, the now Government had repeatedly stated its disapproval of resurrecting the project.
But the former President believes that the coalition Government has killed the project, although it was set to provide Guyana with a massive source of electricity. “This is the year we would have turned on the switch and hydropower would have flowed through the country,” he stated.
Arrangements under the People’s Progressive Party/Civic (PPP/C) Government, would have guaranteed that the Government would not have incurred any debt for this project. In fact, part of the financing was expected to come from a Norwegian grant to buy equity into the project. The remainder would have been private funding from the contractors, who were expected to sell power to Government, some through equity and some through a loan.
An independent assessment of the project had revealed that the only realistic path for Guyana moving towards an emission-free electricity sector is by developing its hydropower potential and the fastest way forward is to maintain the project. The report, which was compiled by Norconsult, an engineering and design consultancy firm out of Norway contracted by the Government of Norway, detailed an “objective and facts-based” assessment of the Project on the agreement of the two Governments.
According to the report, which was handed over to the Government, the first needed step for revitalising the project is a decision by the Government to maintain the project as the priority project in the transition to a green generation regime, as recommended in the “Initial Study on System Expansion of the Generation and Transmission System” of 2014, and reiterated and embraced by Government in June 2016.