The Amaila Falls Hydropower Project is one of the flagships of Guyana’s Low Carbon Development Strategy (LCDS). Once completed, it is expected to remove 92% of Guyana’s energy-related greenhouse gas emissions, deliver energy security for Guyana, provide cheaper energy for citizens and businesses, and promote the achievement of the Millennium Development Goals in Guyana.
It is the largest foreign investment and infrastructure project in the history of Guyana. It will provide a stable and dependable source of energy that will bolster Guyana’s overall economic growth while reducing the country’s dependence on fossil fuel. The Project will reduce Guyana Power and Light’s (GPL) cost of electricity generation, saving an estimated US$3.5 billion for consumers over contract term.
In financial terms, the project will allow Guyana to avoid importing approximately US$200 M in fuel per annum while costing GPL approximately US$100 M per annum on average. Based on current estimates, the project will allow GPL to reduce its generation cost from close to US 20 cents per kwh, to approximately US 11 cents per kwh.
The Project is developed as a Public-Private Partnership, with the private sector leading in developing this project. Government is a minority investor, with the goal of seeking to lower the cost of electricity.
The Project is structured as a 20-year Build Own Operate Transfer (BOOT) arrangement under which GPL will purchase 100% of the capacity of the Project from the private project sponsor, Sithe Global Power LLC. At the end of the 20-year BOOT the Project will revert to GPL at no cost.
The life of this 165 MW hydro project is estimated to be over 100 years but the project is being fully financed and paid off over a 20 year period.
Sithe is an international development company engaged in the development, construction, acquisition and operation of electric generation facilities in attractive markets around the world. The Sithe Global management team has successfully developed over 50 power projects in nine countries representing more than 15,000MW of generating capacity.
The Project comprises of three principal scopes:
- A access road is being constructed by the Government of Guyana. The access road consists of approximately 85 kilometres new roads and 122 kilometres of existing roads that are being upgraded. A pontoon crossing will be established at the Essequibo and a steel-bridge will be built to cross the Kuribrong river.
- A dam and hydropower facility will be built at the confluence of the Amaila and Kuribrong River.
- Utilising the alignment of the access road as much as possible, the construction of an 270 km high-voltage transmission line and electrical interconnect facilities will be developed.
The project is expected to cost US$840 million, including all construction and financing costs. The Project will be funded with 70% debt from China Development Bank and the IDB. Of the US$252 million in required project equity, Sithe Global will contribute approximately US$152 million and the GoG will contribute i) US$80 million, sourced from the GRIF and ii) US$20 million for construction of the access road. On completion, this outlay will be converted to an equity contribution from GoG.
The cost of the project includes 3 major components:
- The cost of the actual hydro project construction project that will deliver 165 MW at the Amaila site for transmission is just over US$393.6 M;
- The cost of the transmission line, the clearing of the transmission line corridor and the road is approximately US$172.3 M.
- Financing and development costs, interest during construction, debt reserve fund, and construction contingency alone account for US$256.3M.
- Reduce GPL’s cost of electricity generation, saving an estimated G$ 700 billion for consumers over contract term
- Reduce GPL’s exposure to volatile international oil prices
- Transform Guyana’s electricity sector from almost entirely oil dependent to one built on renewable, clean energy
- Increase reliability of electricity supply through a world class hydro generation facility and enhanced transmission network
- The Project is the least cost option to satisfy GPL’s base load electricity requirements; other alternatives are either more costly (for example thermal), not suitable for base load (wind power) or insufficient to meet Guyana’s needs (biomass)
- Will lower carbon footprint with significant reduction in greenhouse gas emissions from burning fossil fuels (currently almost 100% of electricity is from fossil fuels)
- Provide economic stimulus that will facilitate growth and development of industries and businesses through cheaper reliable source of power
Considerable information is in the public domain including the Environmental and Social Impact Assessment (http://www.amailahydropower.com/News/KeyProjectDocuments.cfm) , Environmental and Social Management Plans and Consultation Plans (http://www.epaguyana.org/index.php/amailafalls) prepared by Sithe Global and third-party consultants. Additionally, since 2011, Sithe Global has made a number of public presentations. In 2012, the Government made public all information relating to the tender of the access road including all the contracts.