Representative of the Inter-American Development Bank (IDB) in Guyana Sophie Makonnen said the bank’s due diligence on the Amaila Falls Hydroelectric Project will be completed by June or July this year and clarified that a recent visit by a team of IDB personnel was not part of that process.
Speaking to this newspaper on Friday, Makonnen said that a technical team will be in Guyana in a few weeks to advance the due diligence process. The due diligence is being done to determine whether the IDB will be making available a critical component of the financing for the US$840 million project.
With regard to the recent visit headed by IDB’s Executive Director in the United States Gustavo Arnavat, Makonnen said it was a day trip they embarked on that took them to Iwokrama and Kaieteur Falls. As they were returning they overflew the project site.
“This was not a part of the due diligence. It was people who were coming to Guyana and Suriname, who wanted to see [a little bit of] Guyana,” she said.
Makonnen had told this newspaper in October that during the course of the bank’s due diligence, IDB sector specialists will review and appraise the project from an institutional, financial, environmental, and social perspective.
At the end of the due diligence process, the size and nature of a loan for the project will be defined.
She said the due diligence process will include the requirement that a programme be agreed upon by GPL to continue reducing electricity losses. The due diligence will look to ensure that the project strictly complies with the IDB’s environment and social safeguard policies, which cover a wide range of aspects from the environment to involuntary resettlement and disaster risk management.
Makonnen had said that during the due diligence process the bank will ensure that both project developer Sithe Global and the power purchaser GPL have the technical capacity to manage the Amaila project.
She said too that since increasing costs are a perennial concern for infrastructure projects all over the world, the bank will analyse the cost factor and other risks faced by the project as part of the due diligence process. It will assess the potential for cost increases and look at whether the risks are within a range that is reasonably acceptable.
