The government signed an investment agreement with China Railway First Group (CRFG), the company slated to build the Amaila Hydropower plant in China last month.
This is according to the Amaila Falls Hydro Inc (AFH) and Sithe Global, which in a statement said that the agreement governs the fiscal arrangements and certain legal obligations related to CRFG’s activities in Guyana with respect to the project.
The press statement released by Sithe Global, the project’s developer, was in response to local media inquiries about the agreements signed in China last month, when the US$506 million Engineering, Procurement and Construction (EPC) contract for the construction of the plant and transmission line was signed on September 11, by Sithe Global and CRFG.
It, however, noted that neither the Guyana Power & Light Company (GPL) nor the Government of Guyana (GOG) is a signatory to the EPC contract. “AFH…has the contractual obligation to build and finance the construction of the plant, then sell the power to GPL pursuant to agreements to be entered in to with GPL and GOG,” the statement said.
According to the statement, the Inter-American Development Bank (IDB) and the AFH also signed a Mandate Letter, which is a letter agreement that formally initiates the documentation and due diligence phase related to the planned participation of the IDB in the financing project.
The statement reiterated that the project represents the best low-cost, long-term option to reduce GPL’s average generation costs and dependency on imported fossil fuels. “Sithe Global believes that the final Project tariff will provide substantial annual savings to GPL and the public. The Project will provide a significant improvement in the electricity infrastructure in Guyana that will support the country’s overall economic growth and sustainable development, based on a reliable, affordable electrical grid for its industries, businesses and residents,” the statement said.
Officials of Sithe during a visit earlier this year said that the project is contingent on the road sub-component of the project being completed. Government wrested the contract for the construction of the road from Synergy Holdings Makeshwar ‘Fip’ Motilall and gave it to a number of other contractors who should have been doing it in segments. In what could possibly be interpreted as a further setback for the completion of the road sub-component, the government has retendered for the construction of a bridge across the Kuribrong River. This element of the project should have been a part of the work done by Motilall’s firm.
