Ramotar worried about IDB’s outlook on Budget cuts
…looks to ensure country’s hydropower equity in place
By Gary Eleazar
“When the Inter American Development Bank sees this, what do you think will
be their attitude?” asked an incensed Head of State Donald Ramotar, on Tuesday when asked to expand on the impact of the cut in the budget on Guyana’s equity in the Amaila Falls Hydroelectric Project.
Ramotar had just delivered a fiery address to the 2012 May Day Rally where he railed the opposition of threatening the very life of projects.
At present, the future of the Amaila Falls Hydroelectric Project hinges on the US$175M currently being negotiated with the Inter American Development Bank (IDB).
Days before the Finance Minister presented the 2012 Budget, IDB President Luis Alberto Moreno, visited Guyana and met with President Ramotar where discussions were held on the project.
While President Ramotar failed to disclose any details of Moreno’s visit and concerns leading to the delay in financial closure, Ramotar said that the visit is a sign of optimism for the project.
The Hydro project is pegged at US$840M with China Development Bank (CDB) plugging some US$413M in the project; its contracted developers-Sithe Global has committed US$152M and Guyana has committed as its Equity in the Project some US$100.
Bruce Wrobel, Chief Executive Officer of Sithe Global, while on a recent visit to Guyana, said that the company was looking to effect financial closure for the project with the IDB by next month.
He had warned that should this not be achieved, given the volatility of the Chinese currency against the US Dollar, the project could be shelved for another decade.
The IDB’s concern which has led to the delay in the financial closure in large part rests with Guyana Power and Light’s ability to manage the 165MW project, particularly revenue collection and line losses.
Ramotar, during his May Day address, laboured on the point that was expanded on, according to him with the Political Opposition during their talks.
He said that it was pointed out that measures were being effected such as the 69KV upgrade to the grid to ensure that the power entity’s shortcomings are addressed.
The cut in the LCDS programmes in the National Budget represents a chunk of Guyana’s equity in the form of the construction of the access road which was besieged with problems ever since it was awarded to Synergy Holdings Inc headed by Makeswhar Fip Motilall.
Nonetheless, Ramotar says that the Guyana Government will be pressing ahead and seek to ensure that the country’s equity is in place.
“We are going to push, I have not given up on it…This is a good project for the IDB, this is a good project for the Chinese,” said Ramotar as he continued to defend Guyana’s push for Hydropower capability.
He said that the country is going to continue to ensure that its end of the deal is in place but stressed, “We are going to push I have not given up on it…we need cooperation, not what we are having here.”
Financial closure for the project has been elusive for several years now with the newest deadline set as June and hinges on the Inter-American Development Bank. The agreement with the Guyana Government and Sithe Global was inked five years ago.
IDB President Moreno and staff from the bank arrived in Guyana in early February to commence a one-day visit to the country that included a meeting with Guyana’s new President, Donald Ramotar.
Moreno was welcomed at the airport by Minister of Finance Dr. Ashni Singh who updated him and his team on recent economic developments in Guyana, and lauded the Bank’s support to this country’s developmental efforts, including in such areas as infrastructural growth and institutional reform.
Minister Singh also reportedly saluted the longstanding relationship between the Bank and Guyana, and extended special thanks to President Moreno for the close attention paid during his presidency to the Bank’s smaller members such as Guyana and the other Caribbean countries.
Currently, the IDB supports a project portfolio of US$250 million in Guyana covering a wide range of sectoral interventions, including infrastructural development, competitiveness, justice reform, health, education and agriculture among others.
The IDB also granted Guyana debt relief amounting to US$365M in the context of the Multilateral Debt Relief Initiative in March 2007.