Framework agreement for the Amaila Falls hydropower project was signed in Shanghai, China

A framework agreement for the Amaila Falls hydropower project was signed in Shanghai, China yesterday, with President Bharrat Jagdeo in attendance.

The agreement formalizes the cooperation between the Guyana Power and Light Incorporated, Sithe Global Amaila Holdings Limited, the China Development Bank, and the China Railway First Group Company Limited. “It sets out the parties’ intention to reach financial closure on the Amaila Falls project within 12 months or ideally sooner”, Minister of Finance, Dr. Ashni Singh told the National Assembly yesterday, saying also that it was a “historic moment.” President Jagdeo is in China as part of a Caricom delegation.

“The Amaila Falls project is the biggest infrastructure investment in our country’s history. From the start of it operations, it will provide value to Guyanese citizens and the wider economy through cheaper electricity, while simultaneously enabling Guyana to switch from nearly 100% dependence on fossil fuel sources for electricity generation to nearly 100% clean, renewable energy sources”, the Minister said.

He pointed out that 20 years after it begins operation, the hydro-plant will be transferred to the people of Guyana at zero additional cost, thereby “bequeathing long-term independence, national competitiveness and environmental sustainability to our children and future generations”. Singh said that the project will involve utilizing less than 0.001% of the State Forest area. “The government is firmly committed to ensuring that the project complies with both national and international social and environmental safeguards”, said the Minister.

Singh was, at the time updating the National Assembly on the establishment of the Guyana REDD+ Investment Fund (GRIF) and the progress on the Low Carbon Development Strategy (LCDS) and he said that in 2010 and 2011, between US$40M and US$60M will be invested as equity in the Amaila Falls hydropower project.

He recalled that on Tuesday, Jagdeo and Norway’s Prime Minister, Jens Stoltenberg announced that the GRIF will be operational within the coming month. He said that Guyana wants to see a legally binding treaty agreed under the United Nations Framework Convention on Climate Change (UNFCCC) as soon as possible but pending the agreement of such a treaty, the government supports a number of interim measures. The minister pointed out that Guyana has endorsed the Copenhagen Accord, supports the Interim REDD+ Partnership and there is the Norway agreement.

Norway intends to pay US$250M by 2015 for Guyana’s forest climate services. Brazil’s Amazon Fund –atUS$1B by 2015 – is larger, Singh said. “However, relative to the size of the forest covered by the agreement, the Guyana-Norway agreement is by far the world’s most valuable agreement of its kind”.

Singh said that the GRIF will support the implementation of priority LCDS investments from 2010 to 2015, unless it is superseded by an agreed UNFCCC or other international mechanism. The GRIF will be established to meet two objectives.