AFHP could be back with Brazilians this time

Jun 10, 2023 Letters

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Dear Editor,

Kaieteur News – What good news! It is that “There has been active interest from Brazil to bring Guyana’s Amaila Falls Hydropower Project (AFHP) into fruition.” This is the word from Vice President, Bharrat Jagdeo, who explained that “Guyana has received proposals from Brazil and other countries for the 165-megawatt hydropower project, a flagship initiative under the Low Carbon Development Strategy (LCDS).” High on optimism, Jagdeo is anticipating “… that in the near future, Government might go out for another bidding process.” And why not? And the earlier the better.

Editor, not too far back, I recall that our “Head of State, President Irfaan Ali, declaring that despite some hiccups, Government was never going to abandon the Amaila Falls Hydro Project. At the time, the President did reveal that the project was currently undergoing a process, and he was most firm, detailing that “… we are not going to abandon this project, if we have to go out again and again, we will.” And why not?

First, I care little for the logistics and minutiae of the Amaila Falls Hydro Project (AFHP), since for me, what is vital is that Guyana simply move ahead and realise this long overdue ambition. It is most necessary from a financial aspect, and of course, in terms of being climate and environmentally wise, it is the way to go. I back up to December 2016, as many of us seem to forget too conveniently. Back then, the independent assessment of the Amaila Falls Hydropower Project (AFHP) did reveal that the only realistic path for Guyana moving towards an emission-free electricity sector is by developing its hydropower potential and the fastest way forward is to maintain the AFHP.

This report, mind you, was compiled by Norconsult, an engineering and design consultancy firm out of Norway, and which was contracted by the Government of Norway, detailed an “objective and facts-based” assessment of the Project on the agreement of the two Governments, and made some telling statements.

Essentially, the go-ahead from day one was unambiguous, and that was way back in 2016. Part of the statement says that “It is our opinion that BOOT (Build, Own, Operate, Transfer) type public-private partnership model should be maintained for the project implementation. An internationally well-merited investor and operator in the hydropower industry should be invited to take the majority position and the driving seat (main sponsor) in the project company. So, irrespective of the means of accomplishing the AFHP, the bottom line is that Guyana must not stall for too long.

Secondly, when it is all said and done, Guyana will be supplied with electricity “at a cost not exceeding US$0.07737 per KWH, as against what currently obtains, which is also largely fossil fuel-based, at $0.32 per KWH. This must not go on. We also know that power is not stable in many areas, and the current high cost of electricity continues to affect operating performance for businesses and is a major challenge to the productive sector, as profitability is severely compromised.  My hope is that the opposition and skeptics will be unbiased and quit playing politics. The well-being of all Guyanese is far too important and our leaders must be candid when it comes to overall betterment of the country. Yes, Guyana has oil, and even this emerging Oil and Gas sector is being lambasted. I remind all that renewable energy is growing rapidly around the world, but fossil fuels still make up a majority of the world’s energy use. So, Guyana has to be very prudent.

In terms of where we stand, Jagdeo stated that “We’ve now gotten at least two proposals from companies in Brazil to do the hydro, and then some companies out of the US. Soon, you may see us going back out to another [tender] process. But the Brazilians are still very interested in this regard too.”

I can go on and list so many advantages and positive spin-offs in terms of a Brazil-Guyana joint AFHP realization. But for now, readers can envisage things like “… deepening trade relations with the Linden to Mabura road project, as agricultural activities and exchanges will also be easily facilitated; the soya bean project, corn project, agriculture logistics, moving fertilizer and limestone into northern Brazil because there is a huge demand for it for their agriculture.”  In a nutshell, “A huge set of business there will happen.”

I end by emphasizing that even if Guyana has to shift from the BOOT contract to an EPC (Engineering, procurement, and construction-EPC) one, and it devolves to the government’s lead in having to secure the finances for the project, then so be it. It is the end result that matters, both locally and globally. Vice President Bharrat Jagdeo, a while back, summed it up succinctly, stating the preference and that “… if we can’t get it done under the BOOT, we will have to retender…”

Yours truly,
B. Singh

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