China Railway to build Amaila Falls hydro

THE Ministry of Finance has reported that Cabinet has granted its ‘no-objection’ for the Office of the Prime Minister to engage the China Railway Group Limited to construct the Amaila Falls hydropower station (AFHP) based on a Build-Own-Operate-Transfer (BOOT) model.

Under this model, the company will supply electricity to the Guyana Power and Light (GPL) Inc. at a cost not exceeding US$0.07737 per KWH and.
According to a release, this follows publication of a request for proposals by government in various national newspapers during the period July 25 to August 15, 2021.

A total of four companies submitted proposals and the China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee after a rigorous evaluation process, following which the National Procurement and Tender Administration Board (NPTAB) submitted the relevant recommendation to Cabinet for ‘no-objection.’

The AFHP was first identified in 1976 by the Canadian company “Monenco’ during an extensive survey of hydroelectric power potential in Guyana. Various studies have since justified and strongly supported the construction of the AFHP. Recognising the suitability and attractiveness of the project, the pre-2015 PPP/C Government had advanced preparation of AFHP by conducting extensive technical and financial studies of the project, including an environmental and social impact assessment (ESIA).

The then PPP/C Government had also mobilised international investor interest in the project, and a major private international investor (the Blackstone Group) had expressed serious interest in undertaking it. Additionally, the then government had earmarked US$80 million earned by Guyana under the Guyana-Norway partnership within the Low Carbon Development Strategy (LCDS) to help finance equity in the project.

However, these efforts to advance the project were blocked and derailed by the then APNU+AFC opposition, who voted against the project in the National Assembly. The APNU+AFC later maintained their opposition to the project when they assumed office in 2015, but failed to offer any alternative to it.

This was despite the fact that the APNU+AFC Government in 2016, with support from Norway, hired an independent consultant (Norconsult) to review the project. The report, published in December 2016, recommended the development of AFHP as the best option for Guyana to achieve affordable, low-carbon electricity.

The release noted that consistent with a commitment given by the PPP/C to resume work to advance this project in the party’s 2020 manifesto, on the basis of which the party was elected to office in 2020, this government has resumed efforts to realise this flagship project under the new and expanded LCDS.

“In its current formulation, it is expected that the project will require no equity contribution from government, in comparison with the previous project structure which was based on a government contribution of US$100 million. Additionally, the current structure anticipates a cost of power that will be lower than the initial cost of 11 cents per KWH contemplated by the previous project structure.

“The AFHP will lower the cost of electricity needed to power Guyana’s economic diversification and transformation into a low-carbon economy, as well as reduce the cost of power to the businesses and households. The project will also support initiatives such as the electrification of transport and e-mobility and accelerate the development of a robust ICT sector needed for an interconnected world as well as a competitive manufacturing sector,” the release concluded.

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