The Inter-American Develop-ment Bank (IDB) will withhold funding for the commencement of the second phase of the Unserved Areas Electrification Programme (UAEP) unless the Guyana Power and Light (GPL) Inc can cut its losses to 30 per cent from the present 42 per cent.
Speaking to Stabroek News on Wednesday, Rep-resentative of the IDB Sergio Varas-Olea said a team from the IDB recently reviewed the operations of the power company in relation to losses. He said the team and the company had meetings and agreed that reducing losses to 30 per cent from 42 per cent was one of the benchmarks to be met. He said the benchmarks were not time-bound and the company might be looking to reach them later this year or early next year.
Efforts on Wednesday to reach personnel from GPL and the Office of the Prime Minister for a comment on the IDB statement proved futile.
Varas-Olea said the power company and the government were still to complete the first phase of the UAEP and among the unfinished areas were hinterland electrification and network extension.
According to the IDB representative, once the GPL reached the goal of 30 per cent losses, a consulting firm would help the company to calculate the figures and this would guide the decision to release further funds.
However, apart from the attaining of this benchmark, many other conditions had to be met before fresh funding could be released.
The IDB some weeks ago had put the Government of Guyana on notice that consumer uptake for the new service, in addition to reducing losses, must be improved in order for additional funding to be released.
The aim of the bank is to assist GPL to reduce losses to 15 per cent in about three to four years. And GPL had said at a recent press conference that the fundamental challenge to the company was the accelerated and sustained reduction of losses over the next four years.
The company has been stepping up its loss reduction drive in many of the problem areas.
A recent loss assessment done by a UAEP contracted consultant found that 11.04 per cent of the 28.79 per cent non-technical losses related to theft of electricity costing the company $2.4 billion annually.
Of the total commercial losses, 6.46 per cent resulted from the limitations of the company’s billing system costing $1.4 billion annually, and 11.29 per cent to defective meters costing $2.5 billion annually.
Prime Minister Sam Hinds said some weeks ago that the priority of the programme was to reduce losses and increase the number of people taking up the service in newly electrified areas. Hinds had said some progress had been made in the areas of loss reduction and new service uptake, but he said the proposed beneficiaries needed to do their part.
The IDB is the major financier of the US$34.4M UAEP, with the Government of Guyana, GPL and new consumers making contributions.
At least US$3M of an IDB package of US$7.5M included for the UAEP financing was unlocked to be used for loss reduction efforts.
