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Gov’t to seek BOOT investors for Amaila project again
Kaieteur News – Following another failed attempt last year to move to the construction phase of the 165 megawatts (MW) Amaila Falls Hydro project, government is set to re-invite proposals later this week for the initiative.
Vice President Bharrat Jagdeo during his weekly press conference yesterday revealed that the administration will be seeking investors to submit proposals for a Build, Own, Operate Transfer (BOOT) model arrangement. “Before the end of the week, we should also go out back for the hydro power…you would see a new request for proposals before the end of the week to return to that,” Jagdeo said.
The Vice President was keen to note that government plans to re-invite proposals for a BOOT model to avoid upfront costs. “Yes, it would be, we made that clear from the beginning, that’s why we terminated the engagement with the Chinese (last year) because they won it on a BOOT arrangement and then they wanted to transform it to an EPC and we said no. We don’t want to own the plant, we will buy the power.”
He said it was falsely reported that government was going to acquire US$2M in debt but the BOOT arrangement will see Guyana purchasing power from the initiative rather than owning the plant. Jagdeo clarified that if the company, during the construction stage, or during operation, encounters any challenges, Guyana will not be saddled with that debt or cost of investment. According to him, “No, because we are buying power supplied, so they would have a power purchase agreement, so if they can’t supply the power, they don’t get paid. They get paid on power delivered to the Eccles control center that we advertised for.”
On the issue of water supply, he said there will be a reservoir to supply adequate water. “You can’t just build it on the river, you have low drought season and you have rainy season, we showed in the period with drought you would have about 750 I think gigawatt hours and then I think if it goes to the rainy season 1,300 gigawatt hours.”
An artist’s impression of the Amaila Falls Hydro project
The VP anticipates that the cost per Kilowatt hour (kwh) will be sold to Guyana for less now. Last year, the administration was in talks with Chinese Contractor – China Railway First Group, following the outcome of a public procurement process; however the company later pulled out from the arrangement after reportedly being unable to fund the venture.
It was VP Jagdeo who revealed last year that the company’s request to shift to an EPC (Engineer, Procure, Construct) option was not approved by government. Under the BOOT arrangement, the company would be required to finance and construct the power plant for Guyana to purchase power under a Power Purchase Agreement (PPA). After 20 years it would be transferred to the government for free. The EPC contract however required government to finance the project, with the best company being hired to construct the facility. It was reported that a total of four companies had submitted proposals to government for the project at the time, and China Railway Group Limited was identified as the most ‘capable partner’ by the Evaluation Committee after a rigorous evaluation process, following which NPTAB submitted the relevant recommendation to Cabinet for ‘no objection’. Notably, Jagdeo had defended the move to retender the project saying that the second closest bidder would not be feasible since the cost would work out to more than that of the Gas-to-Shore project.
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