Justifying the move to transfer US$80 million to the Inter-American Deve-lopment Bank (IDB) last year for the Amaila Falls Hydropower Project (AFHP), a Norwegian official has said that given the vote in favour of bills in relation to the project, there appears to be sufficient support by the National Assembly for the AFHP.
“Guyana’s Low Carbon Development Strategy (LCDS) was approved by the Parliament in Decem-ber 2009, in which Amaila Falls has been a flag-ship project from the start. Furthermore, the amendment to the Hydro-Electric Bill and the debt ceiling motion, both necessary for the implementation of the hydropower project, were passed by Parliament in August 2013. Hence, there appears to be sufficient support for Amaila Falls from Guyana’s democratically elected parliament,” Director of Norway’s International Climate and Forest Initiative, Per Fedrik Pharo told Stabroek News in an emailed response to questions.
“Furthermore, the Government of Norway is a co-owner of the IDB, and thus considers the IDB’s procedures for environmental, social and fiduciary safeguards and due-diligence satisfactory,” he said. Guyana and Norway have a five-year pact under which Oslo will pay up to US$250 million based on Guyana’s efforts in protecting its forest and meeting enabling indicators.
In his New Year’s address, President Donald Ramotar said that “within months” the government expects to achieve financial closure and the start of construction of the controversial AFHP. He had announced that Oslo had transferred US$80 million to the IDB as Guyana’s equity in the project.
Subsequently, the WPA accused Norway and the IDB of colluding with the Guyana Government “to take part in the unlawful spending of public funds” in the wake of the announcement that the US$80 million sum was being secured for a project which the WPA said was voted against in the Parliament by the opposition with its one-seat majority.
Initially, when the two Amaila matters were first debated, both the AFC and APNU had voted against them but after several Standing Orders were suspended to bring the matters back to the House, the AFC voted with government in support after an amendment. Nevertheless, the intended project developer Sithe Global pulled out of the AFHP in August 2013 citing the lack of political consensus as APNU did not vote for the bills. The company had issued explicit statements that unless all three parties in Parliament backed two measures for the controversial US$858 million project it would pull out. The measures were not fully supported and the company walked away.
Escalated
Since the project was first announced, costs of the 165-megawatt hydro venture have escalated from the original US$450 million to US$858.2 million up to 2013. Recently, it was also revealed that the costs for the access road had ballooned from US$15 million when the contract was signed in 2010 to US$41 million last year.
The WPA had further said that the constitution “unambiguously” requires that all monies belonging to Guyana be paid into the Consolidated Fund, including sums receivable by Guyana under the Guyana-Norway pact. The party said the announcement that Norway recently asked the IDB to receive US$80 million as Guyana’s equity in the project is “a flagrant violation of the Guyana Constitution and the arrangement between Norway, the IDB and no doubt Guyana amounts to a conspiracy.”
Ridiculous
In response, the Office of the President labelled the WPA’s assertions as “ridiculous” and called on the party to apologise to Norway and the IDB.
Prior to Ramotar’s announcement, AFC Leader Khemraj Ramjattan had also expressed concern that there may be “fundamental breaches” of the Guyana-Norway pact as it relates to the AFHP and called for the release of information. “…It is in the public interest of Norwegians and Guyanese to know what is happening between Norway and IDB especially so when firstly, our National Assembly has been undemocratically prorogued with the consequence that it will not be in session so as to permit our parliamentarians to call our ministers to account and explain,” Ramjattan had said in a letter to Pharo.
Operative
“Regarding the suspension of the National Assembly, we note that an election has now been called and believe an operative Parliament is necessary for a functioning democracy in Guyana,” Pharo told Stabroek News.
He said that a request to transfer the money to the IDB by December 12, 2014 was because the date is an internal budgetary deadline in Norway. “If the funds could not be transferred before this date, they would have to be transferred to next year’s budget. That would not have been a major problem in itself – the Norwegian International Climate and Forest Initiative’s funds are transferable from year to year – but given that the funds are payment for verified performance, there was no reason not to disburse it in 2014,” he explained.
As it relates to transferring the funds directly to the IDB rather than through the Guyana REDD+ Investment Fund (GRIF), the Norwegian official noted that the IDB will be administrating the purchase of Guyana’s equity for the AFHP. “Transferring funds directly to them is a way to reduce the administrative burden and costs. The responsibilities of the IDB under this arrangement are no different than they would have been if the funds had been transferred through the GRIF,” he said.
On Ramjattan’s call for information, Pharo said information on the social and environmental aspects of the project are available on the IDB website. “The project follows IDB’s rules for disclosure of information in non-sovereign operations, this means that technical and financial aspects of the project will have to be released by the project’s sponsor,” he stated.
Meantime, Pharo said negotiations on extending the Guyana-Norway forest protection partnership are ongoing and will not be concluded until late 2015 at the earliest. Under the current agreement, the deforestation numbers for 2014 and the progress on the enabling indicators will trigger the final payment. “The current agreement does not contain plans for verification of Guyana’s 2015 REDD+ results. If the partnership is extended, verification will of course be continued, including possible modifications as agreed by Guyana and Norway. In the absence of such an agreement, it will be up to the Government of Guyana to continue the excellent work done by the Guyana Forestry Commis-sion on reporting,” Pharo explained.
When the Year 3 payment was announced in October last year, it was stated that the Joint Concept Note (JCN) was to be published by the end of October 2014 but this has not been done. Pharo said that finalizing the JCN has taken longer than expected. “The reason why it is not publicly available is that it is not finalized. Both the Government of Guyana and Norway are working to complete the JCN as soon as possible. It will be made public as soon as it is completed and agreed,” he said.
