IDB approves US$ 5M loan to boost power systems

TIMES INT'L

The Inter-American Development Bank (IDB) has approved a US$5 million loan to help boost the efficiency of Guyana’s power system through electricity loss reduction measures and improvements in the operation and maintenance of the distribution network.

Experience under a previous IDB loan for Guyana’s electricity sector informed the importance of focused commercial loss reduction actions and the relevance of technical loss reduction actions in lowering levels of electricity losses, the bank said in a statement on Friday, September 9.

The country’s main power utility, Guyana Power and Light Inc (GPL), has estimated that more than half of its technical losses are attributable to deficiencies in the country’s 4000- kilometre low voltage network, 75 per cent of which is in need of upgrading.

“This new programme will rehabilitate a portion of the distribution network and continue a series of commercial loss reduction actions, while financing capacity building and energy conservation activities,” the statement added. At the end of the programme’s four-year implementation period, both the number and duration of power cuts are expected to decline by 40 per cent, while the ratio between electricity supplied and electricity paid for by customers is expected to rise from the current 67 per cent to 73 per cent.

The operation will help to improve the quality of service provided by the utility and strengthen its technical capabilities. It will also promote the efficient use of energy, and the culture of payment in a system where nearly one-third of the electricity generated in 2010 was lost for either commercial or technical reasons.

The loan consists of a US$2.5 million credit from the bank’s concessional fund for special operations for a 40-year term, with a 40-year grace period, and at 0.25 per cent interest rate, plus another US$2.5 million credit from the IDB’s ordinary capital.

This second credit will have a 30-year term, a six-year grace period and a variable interest rate based on LIBOR. The government of Guyana will provide an additional US$500,000 in local counterpart funding.

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