GuySuCo sold co-gen plant to GPL for US$20M

By Kristen Macklingam

The Guyana Sugar Corporation (GuySuCo) will soon move to re-purchase its co-generation plant which was sold in April this year to the tune of US$20 million to the recently formed energy company, the Skeldon Energy Incorporated (SEI).

According to information received, the cash-strapped sugar company will be pursuing the route of buying back this plant from the SEI as many officials attached to GuySuCo are of the opinion that the co-generation plant should not have been sold initially.

But in light of the financial crisis facing the industry and the Chairman of the new GuySuCo Board, Dr Clive Thomas saying that the entity was bankrupt with over $82 billion in debt, it is not clear where the Government or the company intended to source the US$20 million from.

It must be reminded that the SEI is jointly owned by the utilities company Guyana Power and Light (GPL) and the government holding company, National Industrial and Commercial Investments Limited (NICIL).

Guyana Times International understands that when the deal was made and the sale took place a number of questions were raised about this arrangement. This sale had been seen as a bid to ensure that cash was pumped into the struggling sugar corporation as maintenance costs of this plant would no longer have plagued GuySuCo.

However, in light of the recent findings, concerns and recommendations of the ongoing Commission of Inquiry (CoI) into GuySuCo, a decision had been made to retrieve the Skeldon Co-generation Plant since it is said to have been an asset which has a high level of income potential.

It was reported that the sugar company’s former Chief Executive Officer (CEO) Dr Rajendra Singh had agreed to sell the energy asset without obtaining consent from his Board of Directors.

Guyana Times International was told that Chairman of GuySuCo, Dr Clive Thomas recently stated that there was great need for this power plant in relation to aiding GuySuCo’s development, especially since it was revealed that GPL was receiving power under this arrangement at a very low “unacceptable” rate.

It was noted that this Co-generation Plant presently benefits an average of 90,000 residents in the county of Berbice and the repossession of this plant will aid in the restructuring of GuySuCo.

This move can possibly ensure a restoration of ‘normalcy’ at the sugar corporation which continues to suffer massively on an annual basis.

Initially, GuySuCo was to be paid US$30 million for the transfer of the asset and SEI was tasked with supplying power to the sugar company at the same prices that GPL currently pays GuySuCo today.

It was also announced that GuySuCo would sell to SEI the bagasse for the co-generation plant.

Guyana Times International further understands that benefits of the restructuring of the Skeldon energy assets include the enhancement of the generating capacity of the Skeldon Wartsila and bagasse co-generation plants and providing GPL and GuySuCo with a stable and reliable source of power relieving GuySuCo of the responsibility to manage the power generation.

This move was also expected to expand the power generating capacity located at Skeldon, Berbice, as part of the Demerara-Berbice Interconnected System power grid by increasing energy supplied to the grid by 50 per cent by the end of 2016 and almost 100 per cent by 2019.

It should be reminded that the Skeldon Sugar Factory has, over the years, experienced several difficulties in optimising electricity supplies. (kristenm@guyanatimesgy.com)