Sithe Global Senior Vice President Rafael Herz addressing members of the media on March 23
A top official of Sithe Global Limited has said that construction of the Amaila Falls Hydro- power project will start before year-end. He has assured Guyanese that the company has sufficient credentials to build the facility.
Senior Vice President Rafael Herz told media operatives at a media conference on Tuesday that the project, estimated to cost between US$650 and US$700 million, is expected to have a maximum of 165 megawatts of power after its completion some four years hence. “It basically represents a more dependable, reliable and less expensive source of power based on renewable resources … it will represent an independence of large oil imports,” he outlined.
Herz made the disclosures after the environmental and social impact assessment (ESIA) for the highly-touted project was completed.
According to him, consultations with surrounding Amerindian communities as well as town hall-style meetings in Georgetown and Linden are to be held over the coming weeks.
The inputs from these discussions will be included in the ESIA, Herz told reporters. The website: www.Amaila hydropower.com and a telephone line will be made available for comments and contributions. The ESIA is said to be much more detailed and comprehensive than was done in 2002. It was completed by a consortium of three organisations from the U.S.A., Brazil and Guyana.
While Herz conceded that the project will have an environmental impact, he said, “The deforestation cost by this project will result in only about eight per cent of the greenhouse gas emissions that would have been emitted by the thermoelectric fossil fuel generation plants in the country based on a 20-year time period.”
The Amaila project has been dogged by media speculation about the competence of the developer. Quizzed on this issue, Herz declared that Sithe Global has completed several similar projects in the U.S., Philippines, and most recently at Bujagali, Uganda.
“We are very proud of this,” the senior vice president declared to questions about the financing controversy surrounding the latter project in the African state. “Actually, it is nearing finalisation.”
The Uganda project is pegged at US$860 million and is said to be one of the most expensive globally. “What happens with these projects is that things change over time: exchange rates change, material costs change overtime, finance and development costs change overtime; so I do want to be very upfront and open about this: the project is currently tagged at US$650 to US$700 million, it could change over time,” he informed the media.
Guyana intends to spend up to US$60 million of Norwegian REDD-plus money on purchase of equity in the dam. The bulk of the finance is anticipated to come from loans from the China Development Bank and the Inter-American Development Bank (IDB).
However, should the project’s cost increase, this would not necessarily translate into an increase in the rates that would be charged consumers when the facility becomes operational, Herz said.
The dam will be constructed by the China Railway Group, creating employment for hundreds of persons.
Asked from where the workforce would be sourced, Herz stated that Guyana would be given priority to fill the need for unskilled and skilled workers. According to him, the specific needs that the country cannot provide will be sourced abroad. “The job creation during the construction of the project will spur economic development in this country. And I think that’s a more important component of workforce and employment during the construction itself,” he added.
Access road
Meanwhile, rain is affecting construction of the access road, which is being done by Synergy Holdings Inc. According to head of Synergy Holdings, Fip Motilall, additional equipment was brought in on Sunday to advance works which are hoped to be completed within the specified timeline. “We are well on schedule … we’re hoping to have four-wheel-drive access by August.
“Fourteen years of my life has been (invested into) developing hydro; I think hydro is needed in Guyana. I did not bid this project as a project for profit,” was the response Motilall, whose character had come under scrutiny, gave to questions about adequacy of funds to get the road completed. He explained that he basically forewent the 25 per cent mark-up that contractors include in their estimates for such works, and he described his action as “a big risk”.
The access road is to be 65 kilometres in length, and is being built from the Bartica/Potaro Road to the hydro- power plant; and another road, about 20km long, will stretch from the Mabura Hill road to a new crossing of the Essequibo River. These roads are reportedly needed to move equipment into the site, and to accommodate technicians travelling on future maintenance assignments when the plant is in operation.
The Amaila Hydropower Project involves the construction of a hydropower plant in the area of west-central Guyana, where the Amaila and Kuribrong Rivers meet. Electricity produced by the plant will be delivered to Georgetown and Linden by a new 270-kilometre-long high-voltage 230kv transmission line through the Guyana Power and Light (GPL) grid.
Sithe Global will own and operate the facility for 20 years, before handing it over to the government through GPL, with no cost attached.
“Prior to transferring it to GPL, we’ll ensure that GPL will have the technical expertise and knowledge to operate this project as required.” The straight forward Power of Purchase Agreement is currently being negotiated, and should be completed within a few weeks, Herz added.
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