Latest update June 5th, 2026 12:40 AM
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BEHIND THE BALL
The government of Guyana is building the hopes of the Guyanese nation that come next year, work is likely to commence on a hydroelectric plant at Amalia Falls. But is this realistic? Does the government of Guyana really expect the public to believe that the actual construction of a hydroelectric station at Amalia Falls will commence next year?
A contract for the road to the proposed project site has been signed and the contractor has reportedly been given eight months to complete the works. It has also been explained that the government could not wait until it had secured financing for the hydro before it began to build the road, for to do so would have entailed the government having to carry interest on the financing.
But can the government bring financial closure to this deal within the eight months that it will take to build the road? If the government believes this, then it should inform the public just exactly how it hopes to bring financial closure to this deal?
We are told that non-equity funding, that is the money that will be borrowed for this project, is hoped to be secured from either the Chinese government or the Inter- American Development Bank (IDB).
The latter is a development bank that is committed to increasing the transparency of its operations. Once it has begun to consider a project seriously, it would post details of the project on its website. For example it is examining a US$20M funding for the widening of the East Bank Public Road.
This project has not yet been approved but the details are already available on the bank’s website. There is nothing posted about the Amaila Falls Hydroelectric Project.
The IDB is not likely to rush into such a project and definitely not within eight months. They will want to ensure that the project is feasible and will wish to consult with Guyana’s other donors as to carefully assess the impact of any borrowing on the overall debt of the country, as well as evaluate the possible impact on a project of this magnitude on the country’s balance of payments. They will also have to satisfy themselves that the project is not overpriced.
The IDB was approached in relation to the building of a bridge across the Berbice River, but they were not part of the final deal no doubt because of time considerations.
For a project the size of Amaila Falls Hydroelectric Project, we are looking at about five years before any approval may be forthcoming. This is why given the information that is presently in the public domain, it is hard to believe that any work can commence on the hydroelectric station by next year.
It has been rightly conceded that the financing for this project cannot be raised locally. This is why it is necessary for either the Chinese or the IDB to be brought on board. It is good that the government is keeping its options open and not placing all its faith in the IDB, but instead also exploring discussions with the Chinese.
The government also hopes to attract equity financing of the project. But next year is an election year and it will take a brave investor to sink equity into a project in the approach to an election year without any certainty that a new administration will commit to the project.
Investors will be concerned that should a new government win the election it may not go ahead with the project. Who knows, the development banks may share a similar opinion. Even if the PPP wins the next election – there is going to be a new President and no one knows for sure who this person will be and whether that person may not wish to satisfy himself or herself about the viability and sustainability of the project.
For all these reasons, one can say with utmost certainty that the hope for work to commence on a hydroelectric facility next year is a pipe dream. The only thing that we may have by next year is a three billion dollar road and even that is not looking so promising since we are told by a top official of the government that the contractor is “behind the ball.”
With three billion dollars of taxpayers’ money to be outlaid for the road contract, there is therefore a great more to worry about than simply where the government is going to find the money to build the hydropower plant. The major worry at this stage is whether it makes any sense to build the road.
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