Guyana set for another Norway forest deal

Dec 17, 2015 News

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– hope for non-viable Amaila hydro slims
-access roads touching US$50M
Guyana is set to sign another Norway forest conservation deal next year with that country preferring to

fund energy projects rather than the controversial, US$1B Amaila Falls hydro-electric project.
The disclosures were made to government officials by Norwegian representatives during a meeting earlier this month in Paris, France. Also present at the meeting were top officials of Inter-American Development Bank (IDB), which is managing proceeds of that US$250M, ground-breaking forest deal that expired last month.
Yesterday, Minister of Governance, Raphael Trotman, who was part of the Paris meeting with Minister of Finance, Winston Jordan, said that from the talks, it is mere formality that another forest deal will be signed next year. The delay would not hamper or interrupt current collaboration between the two countries.
Norway’s Ambassador to Brazil is due to visit Guyana in January to discuss a new deal.
Under the Norway arrangement, US$80M was allocated by the previous administration for the Amaila Falls hydro deal.
However, the project was halted with the US developer, Sithe Global, leaving after the Opposition, now forming the coalition Government, voted against key environmental legislations necessary for the IDB funding.
Trotman explained, yesterday, that the funds could now be channeled to a number of different “clean energy” initiatives, provided “these projects are realizable, and that the AFHP is abandoned.”
According to Trotman, Guyana’s position on the Amaila Falls project was reiterated to Norway- that Guyana could not support the AFHP in its present form.
He noted that this was so because of a number of unresolved issues regarding the viability of the venture and concerns on the “least cost” of the project.
Guyana did not want to attract any kind of debt where the project was concerned.
Trotman said that the fact that the IDB’s “due diligence” efforts  were “incomplete and inconclusive” and that “key conditions necessary were not met to assure viability, the project did not meet with “buy-in” conditions of potential partners, including Sithe Global and China Railway, the hydro-electric project contractor.
In August 2013, Sithe Global withdrew from the Amaila project, explaining at the time that its go-ahead was contingent on full support from all political forces.
The Opposition, at the time, opposed the project because “it would put the country under a severe debt burden and that there was no guarantee that power from Amaila would have been cheaper for Guyanese.”
In addition, the two forces detailed that Amaila’s cost, which kept increasing, “would have come from ‘loans’ from the IDB and the China Development Bank.
At the said time also, Norway and a critical committee had recommended that no business should be done with China Railway Group Ltd. “
Yesterday, Trotman said that the Government of the Kingdom of Norway “agreed that if it does not proceed with the AFHP, then considerations will be given for alternative uses of the US$80 million currently held by the IDB.”
He further explained that before Amaila can proceed, the IDB wants a close look at a ‘least cost’ study to be done by May 2016, and that there must be a complete review of the project, to determine its viability, but with clear terms of reference and time bound.
With regards to a new Norway deal, Trotman said that that European country wants Guyana to become a member of the Extractive Industry Transparency Initiative, an arrangement which ensure that international standards are being observed.
He emphasised that the process is ongoing, and that Norway is pushing for “capacity building and institutional strengthening” in Guyana as these were priority needs for Guyana.
Norway prefers also to give support to the Guyana Power Light (GPL) for its efforts “to improve energy efficiency,” as this overall is a low-carbon initiative and could get GPL to qualify for monies from the Guyana REDD+ Investment Fund (GRIF).
The GRIF goes back to an agreement signed between Guyana and Norway in November 2009, in which Norway agreed to provide Guyana with up to US$250 million by 2015, in performance-based payments for avoided deforestation in support of Guyana’s Low Carbon Development Strategy (LCDS).
Questioned about the access roads to Amaila Falls, the Minister said that Government is studying the situation with the cost touching almost US$50M.
The roads are being illegally used by loggers and miners. A report on the future use of the roads will determine what it will be used for.
The access roads construction was controversially awarded to Synergy Inc., a Guyanese-owned company, which had no history of building roads in the hinterlands.
In 2012, the new Donald Ramotar administration sacked Synergy and awarded the roads in lots to several contractors, but the cost had kept mounting.
The entire hydro electric and its access roads were a major source of embarrassment for the previous PPP/C administrations as the latter would have been the most expensive infrastructure project ever.

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