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PPP wants Govt to tap Islamic Bank envelope to revive Amaila Falls Hydropower Project
Member of the Opposition, Irfaan Ali, has said that it would be in the country’s best interests for the government to propose the Amaila Falls Hydropower Project to the Islamic Development Bank for funding.
During questioning for approval of expenditures for the budget of the Ministry of Finance, Ali made the proposal to Minister Winston Jordan Friday last.
The Bank had made a US$900M resource envelope of grants and loans available to Guyana, to fund multiple developmental projects, for the period 2018-2020. Guyana has since taken a loan of US$20M to fund Guyana Power and Light (GPL)’s infrastructural upgrades. For those upgrades, the disbursement of funds will start in 2019.
Ali said that it would be beneficial to seek funding from the remaining US$880M towards the controversial Amaila Falls Hydropower Project.
Asked whether the government would propose the project to the Islamic Bank, the Finance Minister said, “I can’t say that we’ll be putting that any time soon to the Islamic Development Bank.”
A photo showing a completely dry waterway at Amaila Falls
Jordan said that the resource envelope isn’t a fund that Guyana currently controls, nor is it financing that Guyana can just take. He explained that the government must find projects that are feasible and workable to propose to the bank, whose framers have strict regulatory requirements for its finance recipients.
He said that the projects considered in the government’s estimates do not include the Amaila falls project, and that the government is committed only to making proposals for bankable projects.
Earlier this year, Minister of Natural Resources, Raphael Trotman, had said that the government had not removed the Amaila Falls project from the table. Though the government had voiced its concern and disappointment with the project, it was still something that the government was planning to consider, since there are hydrologist studies there to determine whether there is an adequate supply of water to generate what is needed to produce electricity.
The deliberations on the project had come to a standstill in 2013, when members of the National Assembly did not vote in favour of certain features of the project as it was presented by its main sponsor, Sithe Global, a US-based investor in the international energy market.
The Government of Guyana, represented by the Minister of Finance and the Minister of Natural Resources and the Government of Norway, represented by the Minister of Climate and Environment had decided at a meeting in Paris in December 2015 to perform “an objective and facts-based” assessment of the Amaila Falls Hydropower Project.
The project was heavily pushed by the last two administrations of the People’s Progressive Party/Civic (PPP/C) but ran into trouble early, specifically problems with the access roads to the Amaila Falls dam site in Region Eight. The roads collapsed in many parts and the contractor was fired. Costs ran from US$15M to US$40M.
The US$900M-plus price tag for the 165 megawatts project was seen as too costly, with criticisms over the technical readiness of the Guyana Power and Light Inc. to take the power.
There were also questions over whether the dam would actually be able to sustain the promised power, with one photo even showing the waterways dry.
For Budget 2019, the Ministry of Finance put aside $37M as Guyana’s capital contribution to the Islamic Bank, as part of its obligation as a member of the bank. Guyana joined the Islamic Development Bank in March of 2016.
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