Brazilian consortium to finance Guyana’s hydropower survey

Mar 25, 2014 News

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–    Prefeasibility study to begin in April

A Brazilian consortium will be undertaking a prefeasibility study to determine the potential of hydropower in the Upper and Middle Mazaruni. The US$45M study will begin in April and will be of one year duration.
Following will be a feasibility study to be conducted for another one year period.

The consortium, comprising two engineering companies, OAS and Quieroz Galvao, will also be financing the construction of the hydropower facilities via a loan from the Brazilian Development Bank. As such, Guyana would not be indebted to a financial institution but has to allow the consortium to supply Brazil with power.
Guyana will benefit from electricity and will receive royalty from the company.
These announcements came during a Prime Ministerial press conference at the National Communication Network’s studio, yesterday. Among those present with the Prime Minister were Foreign Affairs Minister, Carolyn Rodrigues-Birkett; Amerindian Affairs Minister; Pauline Sukhai; Director General in the Foreign Service Ministry, Ambassador Elisabeth Harper; and Director of the Brazilian consortium, Rodrigo D’Olivieira.
Providing a background to the project, Minister Rodrigues-Birkett said that in 2009 at the commission ceremony of the Takutu Bridge, both countries saw hydropower as an important part of the agenda.
President Ignacio Lula Da Silva had said that Brazilian companies were willing to finance the construction of hydropower stations in Guyana.
She added that the next year when President Lula attended the UNASUR Summit in Guyana, he was awarded the Order of Excellence. Discussions on hydropower commenced the next month. A Memorandum of Understanding (MOU) was signed between Guyana and Electro Braz, the agency to look at the Mazaruni/ Potaro Basin, she said.
“We were approached by a consortium of Brazilian companies and after months of negotiations Prime Minister (Samuel) Hinds signed an MOU in October 2011. Thereafter, we decided that whichever company we used must come under the Guyana/Brazil Cooperation,” the Minister said.
Rodrigues-Birkett said that in December 2012, she signed an MOU to establish a working group on infrastructure projects: hydropower, Linden to Lethem Road, and a deep water port in Guyana. A Joint-Commission was established to monitor the activities for the completion of each project.
With responsibility for energy in Guyana, Prime Minister Hinds said that consultations at the national level have begun.
He said on March 19, last, Government engaged representatives of political parties in Parliament, the private sector and Executives of the National Toshaos’ Council. From March 20 the Prime Minister and a team consulted with several communities in Region Seven. The party visited Kamarang, Jawalla, Kako and Imbaimadai, among the locations in the Upper Mazaruni.
According to Hinds, residents in the Upper Mazaruni were concerned that the project would result in their communities being flooded. However, the Prime Minister assured that Government will not engage in the project that would result in the flooding of the communities to the extent that would have occurred with the designs of the 1970s.

He said that from the 1970s to now technology has evolved and the approach to the design would reduce the reservoir by 90 percent or more in comparison to the previous one.
Hinds noted that a number of studies to pursue hydropower in Guyana were done but were never successful in advancing long-term sustainable project.
The hydropower station in Upper Mazaruni would have an installed capacity of 3,000 megawatts and the other in Middle Mazaruni would have an installed capacity of 1,500 megawatts. These data were obtained in a preliminary study conducted by the consortium.
According to Mahender Sharma, Head of the Guyana Energy Agency, the prefeasibility and feasibility studies for the Upper and Middle Mazaruni are intended to identify the social and environmental economic impacts of a hydropower plant in the areas.
The study would seek to collect information on areas such as the size of the reservoir, storage required, how much power could be generated at any one time over a hydrological cycle, cost of construction, cost of operation, and cost of transmission line.
The study would also look at the construction of the roads network to access the facilities.
He said that another aspect of the project is building an interconnected transmission line and electrical interconnection line between Guyana, Suriname, French Guiana and Brazil. The idea is to put power on the international grid for marketing purposes.
According to Rodrigues-Birkett, “We all know that Brazil needs additional energy and she is willing to buy from whoever is willing to sell. Guyana needs cheap and reliable energy, and to expand our revenue base as well.
“We know that the three countries that surround us– Suriname, Brazil and Venezuela— have both hydro and oil. We have neither as yet and so it is important we work to get this done. If feasible, of course the excess energy would be sold to Brazil.
“And I want to stress excess energy because we are hoping at that time for additional energy even with the construction of the Amaila Project.”
She noted that currently an ongoing study funded by the Inter-American Development Bank is looking at that interconnection. “So we could put power in the transmission lines and where it is needed we sell it…At this point Brazil has indicated its interest from Guyana hence the studies to be done.”
Early in the negotiations aspect of this project, Government and the consortium have to work out the financing aspect of supplying the other countries with electricity.
Hinds said that quite a lot of power would be sold to Brazil. He explained that there will be moneys paid to Guyana for producing the electricity utilizing waterfalls. However, at a later stage there will be financial engineers working through questions as to who will earn revenue sold to the countries.

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