The final review of the Amaila Falls Hydropower Project (AFHP) has not yet started and while Norway has identified an international consultant to undertake the review, the Government of Guyana is requesting that three nominees be submitted from which it would select one to undertake the project.
Both sides are awaiting the study on the contentious AFHP to make a definitive decision on how to proceed. The AFHP was the flagship project of the five-year forests protection partnership –which ended last year – between Guyana and Norway in which Guyana could earn up to US$250 million in performance-based payments based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities. REDD+ is a global initiative that aims to reduce greenhouse gas emissions from deforestation and forest degradation.
Norway had transferred US$80 million to the Inter-American Development Bank for the project but the David Granger administration has said that as currently configured, “it would not only be irresponsible, but a downright criminal act of deception,” if government proceeded with Amaila.
Subsequently, both sides agreed to a final, independent review of the project and in a letter in yesterday’s Stabroek News, public relations officer for the Ministry of Finance Wanita Huburn indicated that the study had not yet started.
In her letter, Huburn recalled that during talks in Paris in December last year, it was agreed that Norway would engage an international consultant for a final review of the AFHP.
“To date, Norway has proposed a nominee to undertake the review, but the Government of Guyana has requested the submission of three reputable, independent, international consulting firms from which one would be selected by the Government of Guyana to conduct the review,” she wrote.
Norway had previously urged the APNU+AFC administration to consider the merits of the AFHP and indicated that Guyana stands to lose the US$80 million earmarked for the project if it fails to come up with a plan for “transformational” renewable energy sources that can be realised in the next few years.
Director of Norway’s International Climate and Forest Initiative Per Fedrik Pharo had told Stabroek News last year that as agreed between Guyana’s previous government and Norway, the US$80 million was dedicated to the Amaila project and will be transferred back to Norway if it is not used.
Asked, if Guyana does not have a say in how the money is used since the money represents payments earned, Pharo pointed to the Memorandum of Understanding (MoU) and said if Guyana comes up with a timely renewable energy plan acceptable to both countries, the money could be used for those projects.
“It is laid out in the MoU between our two countries that the payments from Norway shall be used for low carbon development, including transforming Guyana’s energy sector to renewable energy. As agreed between Guyana’s previous government and Norway, the US$80 million was dedicated to the Amaila project. The money could, if agreed between our two countries, be used by Guyana on other transformational renewable energy sources that can be realised in the next few years, if Guyana should choose to move in this direction in a timely manner,” he had said.
Minister of Finance Winston Jordan subsequently said that the US$80 million could go to other energy projects if Amaila hydro does not go through.
Speaking about the meeting in Paris in December, he had said: “Our position remains the same, which is that the Amaila [Falls] conception [is flawed], we cannot go ahead with it. We think that it is too costly. It hasn’t been properly studied, it has environmental, engineering and other issues, and so what we are saying is that if those can be solved, we would be happy to reconsider the project and that is what we said in the meeting and it was accepted by all sides,” Jordan had said.
Last month, during a meeting with a visiting Norwegian government delegation, Minister of Natural Resources Raphael Trotman had informed Ambassador Aud Maritt Wiig that the Amaila project was never taken off the agenda.
“Amaila Falls can and should produce energy for Guyana, but at the cost of US$1B for 160 megawatts we didn’t believe that we were getting the best deal. We are committed to hydro, we are committed to Amaila, but we were not committed to that financial model that Sithe Global and China Railway had presented,” he explained. The government had indicated that it was looking at a matrix of renewable energy sources.
