Mar 17, 2016 News
The future of Guyana’s Amaila Falls hydroelectric project is now resting in the hands of an independent Norwegian consultant.
According to Government, yesterday, it has been agreed that Norway’s largest consultancy firm, ‘Norconsult’, will be retained for a review of the project.
Almost US$80M of Norway’s forest funds had been earmarked for the Amaila Falls project but the planned construction, the biggest ever infrastructural one for Guyana, was shelved after the previous Parliamentary Opposition which now forms the coalition Government, refused to pass key environmental legislations in 2013.
This caused the project developer, US-owned Sithe Global to pull out.
The former Opposition had insisted the project, expected to cost Guyana around US$900M, was too expensive.
Now in Government, the David Granger administration is insisting that while Amaila Falls is a good concept, the financial structuring needs review before it can be accepted.
“A decision was recently made to utilize Norway’s largest consultancy firm ‘Norconsult’ for this review. With over 50 years of international experience in power generation and energy supply engineering, the Ministry of Finance and Cabinet considered it the best option for an objective re-assessment,” Government explained of the review by the Norwegian firm.
“This decision follows up on one taken by the countries in Paris, France, in December 2015 to conduct a review of the project’s current financial model, which the government believes could shackle many generations of Guyanese to debt.”
Five years ago, the relationship between Guyana and Norway took a dramatic turn with the two countries signing a ground-breaking forest deal. Norway, an oil-rich, first world country, agreed to pay Guyana up to US$250M over a five-year period to maintain its forest in a sustainable manner, using a number of established checks and balances.
Guyana lost a few million dollars even as the deal ended late last year. Norway, it seems, wants to renew the deal.
New Forest deal
According to Government yesterday in a statement, the two countries have been actively engaged in the strengthening of the agreement to support Guyana’s low carbon and green growth focus.
In January, Norway sent a delegation, to reaffirm its commitment to the partnership, “a position that was echoed by the Ambassador of the Kingdom of Norway to Brazil and Guyana, Mrs. Aud Marit Wiig, when she visited the country.”
The statement from Government said that a number of developments have since fortified the connection between the two countries with the cordial exchange of letters between the new Ministers of Norway and Guyana.
Norway has undergone some internal ministerial changes at its Ministry of Climate and Environment while Guyana has formally established the Ministry of Natural Resources.
Guyana is preparing for a visit, in April 2016, by a Norwegian delegation comprising members from the Ministry of Climate and Environment and Norway’s Development Agency (NORAD).
“The visit is expected to deepen the partnership and collaboration to complete outstanding deliverables of the MoU that the new government inherited.
The Guyana team is actively preparing for this eagerly anticipated visit and all stakeholders will be engaged throughout this process.”
In December, the administration insisted that it remains committed to pursue the development of its own hydroelectric facilities.
Five of 67 possible sites are currently being assessed by the Inter-American Development Bank (IDB) for development. The assessment is expected to be completed by May 2016.
The five sites, according to Minister of Public Infrastructure, David Patterson, are Kamaira, Kumu, Tumatumari, Tiger Hill and Amaila Falls.
The government also said it is considering using US$80M from the Norway funds that was set aside for renewable energy development.
Amaila Falls was the favoured site for a 165-megawatts hydro with the previous administrations of the People’s Progressive Party/Civic heavily pushing for it. Already roads, costing at least US$40M leading to the site in Region Eight, have been completed.
Critics have been placing final costs of the Amaila Falls project up to US$1B. With regards to the assessments of the five sites, Minister Patterson said, “At the end of this process, we will obviously assess them. However, we will look to use the US$80M in the most acceptable means of renewable energy … but it could be any form of large scale renewable energy – which is the understanding that we have so it’s a process which we are going through, and I think it’s a wise way to go forward.”
Government is also working with the Government of Brazil and other interested stakeholders in seeking additional funding for the hydro power and renewable energy project that is projected for the Mazaruni area, Region Seven.
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