Government is vigorously pursuing private sector investment in the alternative energy sector, specifically hydropower and bio fuels, said Minister of Finance Dr Ashni Singh during the reading of the National Budget on Friday.
Government is working with Synergy Holdings Inc, a strategic private partner, on the Amaila Falls Hydroelectric Project.
The Minister said that engineering, procurement and construction bids are expected to be solicited in the second quarter of this year with financial closure coming later in the year.
Synergy Holdings announced last month that it had entered the final stage of preparing bid documents for the project to allow it to solicit international engineering, procurement and construction bids. The company said at that time that the US$371 million project had all the equity it needed and it was fully engineered and ready to go out for international bids and financial closing.
Synergy Holdings Inc had expressed the concern that because of Guyana’s poor credit rating and the inability of the Government of Guyana to provide a sovereign guarantee for the hydro facility, the project will depend on the financial strength of the Guyana Power and Light (GPL). Synergy Holdings had noted that GPL was not in the best financial position and this made the banks more cautious and because of this, Synergy and the government will need to work together to attract the best possible financing terms so as to get the lowest cost of power out of the project.
The project schedule has construction starting this year and delivering power to GPL in December 2011. In the first phase, the project’s capacity will be 100 megawatts and in the later phases, this will be expandable to 1,000 megawatts.
With respect to bio fuels, Dr Singh said: “We are currently in receipt of 11 private sector proposals for investment. These will continue to receive our vigorous and positive attention.”
The 11 proposals are likely to be evaluated during the first half of this year with assistance from the Inter-American Development Bank (IDB) and the UN’s Economic Commission for Latin America and the Caribbean (ECLAC). Ten proposals are from eight countries and one is from a local potential investor.
Further on energy, the Minister said that the recent decision by the Tribunal in the matter of the arbitration between Guyana and Suriname paves the way for a resumption of petroleum exploration activities in the affected area. “That area is thought to have considerable economic potential. Government will continue to facilitate and encourage exploration activities. If these were to be successfully completed and if we were to discover and bring into production an economically feasible deposit, the economic implications for Guyana would be very significant in the long term,” the Minister said.
Three large petroleum companies, CGX Energy Inc, Exxon and Repsol YPF are currently going through the processes with the Guyana Geology and Mines Commission (GGMC) with a view to restarting their exploration activities in the offshore basin.
