Dear Editor,
In an article which appeared in the news media on November 9, Bharrat Jagdeo, ex-President of the PPP government and now Opposition Leader continues to plug the dubious claim that development of the Amaila Falls Hydropower Project (AFHP) on the Potaro River will provide the best chance Guyanese will ever have to access affordable and reliable electricity. He further stated his willingness to help the “foot dragging” APNU+AFC government understand AFHP’s potential for greatness which in his opinion will relieve the private sector and overall economy of expensive electricity, thereby restoring their competitiveness for years to come.
During his tenure as president some of the preliminary works for AFHP were done and kept in secrecy while his authoritative style of governance blinded his capability to understand fully how complex and large projects are planned, financed and executed. Construction of the access road to the Falls commenced under his watch with the cocky assurance that the road will be completed well in advance to hand over to external financiers before the start of their construction of AFHP. No financier was found willing to fund the project and the road is yet to be completed while it is accumulating large time and cost overruns at taxpayers’ expense.
No large complex project gets off the ground unless funding is secured for its execution. AFHP was projected to cost over US$1.0B but the PPP government did not have the money to finance it. Therefore funding for AFHP was expected from a consortium comprising the development banks (World Bank (WB), Inter-American Development Bank(IDB), Caribbean Development Bank(CDB), etc), investors and donor countries. Financing from some of these sources was never sought, while those with which there was dialogue and showed interest, requested more information and data on the project to enable them to make credible assessments for viability and risk levels determinations. The IDB after review of some of the data presented considered the project too risky to attract its financing and withdrew. Hence Mr Jagdeo’s PPP government never received any international financing for AFHP, but he is convinced that as Opposition Leader and with threats of exposure to Guyanese of hitherto unknown facts about AFHP, the APNU+AFC government will cooperate with him and together they could formulate a plan to obtain financing and make AFHP a source of cheap electricity for Guyana.
The cost for a kwh of electricity delivered to Linden and the coastland from AFHP cannot be determined until its capital, maintenance and borrowing costs, together with their amortization are known. Therefore Mr Jagdeo as well as the APNU+AFC government could only guesstimate at this time what electricity will cost in Yr 2025 when AFHP could be expected to be operational should the project re-start this year and a credible and viable feasibility study is readily available for investors.
Mr Jagdeo should note that the US, UK, Germany, Denmark and many other countries are investing heavily in wind turbines and solar panels to generate electricity the rates for which are becoming increasingly competitive. He should therefore work assiduously to convince the APNU+AFC government that GPL should start buying its electricity supply from competitively priced wind and solar panel power suppliers and not hydro. This will no doubt give Guyanese the best chance to access affordable friendly, clean and reliable electricity for years to come.
Yours faithfully,
Charles Sohan
