When APNU scuttled Amaila Project, it likely jeopardised renewal of the US$250M LCDS

Dear Editor,
In 2014, the Kingdom of Norway deposited US$80 million earned by Guyana under the LCDS, into the IDB to be invested into the Amaila Falls Hydro Project on the principle that the project would go forward with China Railway stepping into the shoes of Blackstone. Its purpose was to be part of the Government of Guyana’s equity contribution as part of a US$850 million total investment.
In 2015, when APNU/AFC came to power, the IDB was willing to proceed with Amaila, using China Railway as the new equity investor. One would recall that Sithe Global, part of Blackstone, walked away from Guyana, after spending US$25 million in development costs after APNU voted down legislation in 2012.
Under the IDB terms in 2015, with over US$600 million in expected funding from the Chinese, including the China Development Bank (CDB) and the balance from the IDB and the Government of Guyana, the Amaila project would have started construction by end of 2015 and be commercially available in 2019, delivering 165 MW power into the grid at Sophia at a cost of no more than US ten (10) cents per kWh.
Unfortunately, APNU/AFC did not find favour with the project, and in so doing, scuttled the Amaila Falls project. As of today, there has been no new generation built for the Demerara Berbice Interconnected System (DBIS), resulting in the real risk that GPL’s current capacity will be insufficient to meet demand in the near-term future, if not already.
In June 2009, the LCDS was launched with the Government of Norway. Under this scheme, Guyana stood to earn US$250 million by 2015. The scheme would then be renewed. The deposit of US$80 million out of the LCDS earnings and the start of Amaila in 2015, would, therefore, have signalled the near completion of the first phase of the LCDS, with most of the US$250 million earned being committed to a multiple of LCDS approved projects including Amerindian Land Titling, small business grant initiatives, to name a few.
Unfortunately, APNU decided not to proceed with the Amaila project, despite Norway hiring consultants (Norconsult) who validated that the Amaila Falls project was the best option for power generation for Guyana. Still, APNU stubbornly said no. In 2019, after four years of stagnation of the LCDS and failure to resolve matters on Amaila, the Norwegians finally agreed to transfer the US$80 million earmarked for Amaila to a World Bank account, to allow other investments, but only once the 2020 March elections were completed.
A careful review would reveal that had Amaila proceeded in 2015, with the majority of the US$250 million earned and committed to green projects at that time, the Kingdom of Norway would have been quite willing to renew the programme and provide another US$250 million or more, for similar type projects.
Given that this money is essentially grant money, on the condition of Guyana maintaining its forests and limiting the deforestation rate to historical levels, today in 2020, Guyana could have been so much richer with the earning of another US$250 million.
The lesson learned today. Guyana in 2020 could have been US$250 million richer had we proceeded with Amaila and renewed the LCDS with Norway. Guyana today could have added 165 MW of renewable power to the grid thereby allowing Guyana to save between US$100 million to $200 million (depending on the price of oil) in fuel costs. Instead, GPL has added no new generation capacity. With most of its existing Wartsila generation being fully depreciated, and no new baseload generation under consideration or construction, a dark future lurks as a result of APNU’s lack of vision. Or was it spitefulness against the legacy of former President Bharrat Jagdeo, who was the architect of the LCDS and recognised globally as a Hero of the Environment and his pioneering work with McKinsey on climate change?
Sincerely,
A Grant