As it vowed it would do after acceding to office on August 2nd last year, the PPP/C government has formally served notice that the Amaila Falls Hydropower Project (AFHP) is back on the agenda with the expectation that construction will begin in the second half of next year.
According to the Request for Proposals (RFP), which was issued by the Office of the Prime Minister, the government wants to have the project completed and commissioned by the end of 2025.
The RFP notes that the Guyana Power and Light’s current Development and Expansion (D&E) Plan for 2021 to 2025 projects total capacity required in 2025 as 465 MW and energy of 2,900 GWH.
The government is proposing an energy mix that will utilize both natural gas, Heavy Fuel Oil, and renewables (hydro, wind, solar). In 2026, the government, according to the RFP, says it expects demand to be met by its lowest cost of supply, which is expected to be derived from gas (up to 300 MW), Amaila (165 MW), and other renewables and non-renewable capacity to make up any balance or serve as back-up.
According to the RFP, the Summary of the Scope of Works entails a 165 MW installed hydro dam, plant, and related works; Transmission Line and Structures: 270 KM double-circuit 230 KV from Amaila to Sophia; 230 KV Substations in Linden and Sophia; Creation of a 23 square KM storage reservoir; upgrades and completion of roads and bridges to the site (85 KM new; 122 KM existing); and assumption of all geo-technical risks including guarantees relating to the structure of the reservoir, dam, and transmission towers.
The Government has asked that proposals submitted by prospective developers be made under both the Build-Own-Operate-Transfer (BOOT) and Design-Build-Finance (D-B-F) models. The deadline for the RFP is September 26, 2021.
The soundest argument for the AFHP is that once successfully achieved it would create the critical mass of clean, renewable energy that the country needs to fulfil its international climate obligations under the Paris Agreement and its aspirations to be a Green State. However, the noblest aspirations are no guarantee that the journey will be any easier and given what the public knows about PPP/C governance and the general incapacity in the country there is need for great caution with this huge project and its even grander companion, the gas-to-shore-to-energy project.
Perhaps, the only reason why the country is not currently in the presence of hydropower from the AFHP and grappling with the challenges of managing the project is that the Ramotar administration of 2011 did not have a parliamentary majority. Without this majority and the inability to provide assurances to skittish investors the project not unexpectedly collapsed. Whereas for reasons of practicality in 2011 a parliamentary majority was a prerequisite for the project to go ahead, in 2021 it is even more important that there be bipartisan parliamentary input in approving both of these projects.
What is the prospect of this occurring? Zero to one. With a comfortable majority in Parliament, the PPP/C government will not be restrained. It will simply mow down all obstacles in its way and proceed with these two projects. It has already on its own and without any convincing compendium of expert reports and evidence decided that the gas-to-shore-to-energy project is a winner and will proceed at a price tag of US$900m and possibly more, much of this taxpayers’ money. The public’s only apparent input at this point is in tendering suggestions for matters to be included in the Environmental Impact Assessment which is be done for this project and which will ostensibly lead to mitigatory measures to be taken in the rolling out of the gas-to-shore project.
While it may not be able to change the government’s thinking on these mega projects, the main opposition is as moribund as it had been whilst in government. Its leading lights are fully engrossed in all manner of foolish parliamentary manoeuvres rather than awakening Parliament’s Natural Resources Committee with immediate and frequent virtual hearings on all aspects of these two projects. Where is its demand that there be a full hearing before the committee on the gas-to-shore project? Will it arise from its stupor and at least try to defend the public’s interest?
One of the lasting memories of the aborted effort at the AFHP was its inauspicious beginning by the assigning of the access road for the project under the Jagdeo administration to Mr Fip Motilall. He had undertaken no such enterprise before and should not have been awarded the contract which was eventually terminated by the Ramotar administration. That decision to award the contract to Mr Motilall, however, has become a motif in how one considers PPP/C governance and won’t be easily effaced.
Given all that has transpired since the AFHP was first conceptualised, one would have assumed that an updated feasibility study encompassing the Amaila Falls and other prospects for smaller hydropower projects would have been undertaken. This does not appear to be in the thinking of the government at all. The singular focus on Amaila – 165 megawatts – will rekindle some of the major concerns of the past. Is there a reasonable prospect that even with a substantial reservoir that the project will be supplied with a sufficient flow for year-round generation of power or is there a risk that 165 MW or a significant portion could be lost for a part of the year? What are the risks of feeding this large amount of power to the coast via a single conduit that could be disrupted by any number of factors? With the continuing instability in the Transmission and Distribution system and no guarantee that it would be remedied by 2025 what portion of the hydropower and from the gas-to-shore is likely to be lost? Are there hidden escalators in the cost of the hydropower such as financing charges which will result in much higher cost to the end consumer?
It beggars belief that with all of the outstanding questions and the huge investment entailed that the government would be seeking requests for proposals by September 26 this year and the start of construction in the second half of next year. That, however, is what the country faces and all stakeholders must play a role in ensuring that this project is feasible and properly thought out before it is proceeded with.
