Financial closure soon - Dr. Luncheon

Financial closure soon – Dr. Luncheon

Jul 02, 2010 News

– no date identified

The government intends to see financial closure “soon” on the Amaila Falls hydro project, Cabinet Secretary and Head of the Presidential Secretariat Dr Roger Luncheon stated yesterday.
“The engagements with the donors who are contributing and (the engagements) with those who are putting up equity that continues to allow us to almost optimistically expect closure soon,” Luncheon told his weekly post-Cabinet press briefing at the Presidential Secretariat in Georgetown.
After a meeting in Washington in November 2009, President Bharrat Jagdeo announced that the Inter-American Development Bank (IDB) and the China Development Bank are likely to finance the Amaila Falls hydropower project.
The project is slated to cost over US$500 million and is expected to significantly bring down electricity costs in Guyana and satisfy Jagdeo’s drive for a low carbon economy.
The IDB had arranged a meeting of financiers in Washington, and the President told reporters at his office that the meeting went well and the project seems on track for a mid-2010 start.
But it is now mid-2010, and the project has not seen financial closure. Further, the controversial preparatory works are yet to start. Yesterday, Luncheon claimed that the government never attached an exact timeline to financial closure for the project.
While saying that financial closure could come soon, Luncheon said the government was “not prepared to identify a specific date.” Jagdeo had said the equity partner has already committed its share of US$130 million in the project and the government has set aside over US$20 million to undertake preparatory works, such as an access road to the site. The road project, which was awarded to Synergy Holdings Incorporated, has come under increasing scrutiny.
The Amaila Falls hydro-project is expected to supply 150-megawatts of electricity to the country, which will significantly free up resources used to buy fuel to generate electricity. Guyana’s annual fuel import bill is US$350M.
This week, Finance Minister Dr. Ashni Singh stated that the project is a private sector project, with international investors as the project sponsors and said any request for support would come in the first instance from the private sponsors of the project and not from the State, although the State would be likely to support any such request.
Singh said the project sponsors have been engaged in discussions with the Bank’s private sector arm, the International Finance Corporation (IFC), and other institutions within the World Bank Group, along with several other sources of financial and non-financial support for the project.