Tuesday, April 5, 2011

Norwegian team given aerial tour of Amaila Falls

… Part of US$70M Norway funds to go to hydro plant

A NORWEGIAN team, led by Minister of Environment and International Development Erik Solheim was during a recent visit to Guyana given a fly-over of the Amaila Falls in Region Eight (Potaro/Siparuni) to have a view of the waterfall that is earmarked to be the source of clean energy for Guyana as the country advances along a low-carbon development path.

A major portion of the US$70M granted to Guyana through its partnership with Norway for forest and biodiversity services during 2010 and 2011 will be invested in the Amaila Falls hydroelectric plant.
The hydropower project is estimated to cost in the vicinity of $450M, which includes $305M for the plant, and approximately $140M for the transmission lines.
On July 15, a framework agreement between the parties to the Amaila Falls Hydro-Plant project was signed in China, formalising the cooperation between the Guyana Power and Light (GPL) Sithe Global Amaila Holdings, China Development Bank, and the China Railway First Group.
At a press conference on July 23 last, President Bharrat Jagdeo reiterated that the money will be used as the loan component for the project, and highlighted the importance of reducing the equity financing for the project, so that the remuneration rate will also be reduced.
“This is why we have set aside some amount of money from our Low Carbon Development Strategy (LCDS) to buy some of the equity. To the extent that we can do this, the price also comes down,” President Jagdeo had said at the time.
The Amaila Falls project is the biggest infrastructure investment in the country’s history, aimed at providing cheaper electricity, while simultaneously enabling Guyana to change its dependence from a fossil-fuel-sourced electricity generation to clean energy.
This will see the cost of electricity being one-third of what is being sold by the Guyana Power and Light (GPL) at present.
“It could reduce consumers’ bills; it would lead to industrialisation because of cheaper reliable power and US$100M that we spend every year to import fuel to generate electricity, the country will save that. So it will have a big impact on our balance of payment and therefore, greater stability on our exchange rate and inflation rate,” President Jagdeo said.
The hydropower project is one of many major investments which the government will undertake, with the financial flows coming from the country’s Low-Carbon Development Strategy (LCDS).
Education and health, Information Communication Technology (ICT) related services and strengthening sea defence are also among the priority projects.
The US$70M deposited into the Guyana Redd+ Investment Fund thus far was granted to Guyana based on the results of an independent verification process, which proved that Guyana has maintained its thick forest reserves over the year as outlined in the Memorandum of Understanding established between Guyana and Norway in November 2009.

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