Hydro project with Brazil seen as helping Guyana consolidate hold on Essequibo – WikiLeaks cable

A WikiLeaks cable from the US embassy in Brasilia in 2009 noted ongoing talks between Guyana and Brazil on a massive hydropower plant and said that President Bharrat Jagdeo’s thinking was that it would help to consolidate Georgetown’s hold on Essequibo which is the subject of a  longstanding controversy with Venezuela.

The last official word from Brasilia on this project came in November last year when former Brazilian President Luiz Inacio Lula da Silva declared his country and successor’s continued commitment to it. He was speaking at a ceremony in Georgetown where he was conferred with the Order of Excellence.

An October 9, 2009 cable under the name of Charge d’Affaires in Brasilia, Lisa Kubiske noted that International Advisor to Brazil’s Minister for Mines and Energy Edison Lobao, Ambassador Rubem Barbosa had told Econoff on October 5, 2009 that in addition to augmenting the energy capacity for both countries, and bringing Guyana closer politically to its South American neighbours, the project would have the effect of allowing Guyana to establish government infrastructure in Essequibo which is the subject of the controversy with Venezuela.

Kubiske noted that the idea to construct the  binational hydro plant in Guyana’s border region, near the Brazilian state of Roraima, stemmed from a meeting between Brazil’s former President Lula and Guyanese President Jagdeo on September 14, 2009 when the two inaugurated the Takutu Bridge which is intended to be “part of the highway linking Brazil to the sea through Guyana.” Analysts believe that Brazil is very keen for access to Guyana’s Atlantic ports as a conduit to its northern states like Roraima.

Kubiske’s cable said that  Jagdeo, apparently aware of similar Brazilian projects, including the Itaipu Dam with Paraguay and plans for five new dams being constructed with Peru, asked Lula for help in meeting Guyana’s energy needs. She noted that two weeks later, Lula sent a delegation to meet with Jagdeo, led by Energy Minister Lobao who was accompanied by Barbosa. The group she noted, included representatives of Brazilian National Development Bank and likely project financier BNDES, and the Brazilian state-owned electricity company, Eletrobras, which has been mandated by Lula to pursue foreign operations with a goal of boosting energy integration throughout the continent. She said that Barbosa cautioned that talks are still in the initial stages, with Electrobras doing an assessment of the area to determine the potential for such a project.

Ten-year timeframe

As currently conceptualised, Kubiske said that the hydro power plant would generate 800 megawatts (MWs) of electricity, with 200MWs going to Guyana and the rest returned to Brazil. Brazil would lay additional transmission lines to channel the excess electricity to the Amazonian region of Manaus. Despite some press reports that the project could be completed by 2015, Barbosa felt that such projections were likely inaccurate and premature given the very early stage of discussions. He felt a ten year timeframe was more realistic. While helping to meet the pressing energy needs of Guyana and electrifying undersupplied areas of Brazil would be the main reason for undertaking such a project, Kubiske said in the cable that  “Barbosa confided that the political reasons for doing so were also compelling. Given that the proposed hydroplant would be built in the section of Guyanese territory that is (claimed by) Venezuela, Jagdeo, according to Barbosa, sees this as an important effort to consolidate Guyana’s claim to the area. Asked if this wasn’t a problematic element of the plan from the Brazilian perspective, Barbosa responded that Jagdeo had observed that Venezuelan President Chavez had not involved himself in the question of the (controversy). This fact, combined with the ruling by a third party arbiteur that the area in question was Guyanese land, in Barbosa’s estimation provided sufficient comfort for Lula to proceed.”

The cable further reported  Barbosa as saying that Jadgeo said he is also interested in the project as a means of integrating Guyana more into the South American community, noting that Guyana’s future lies with the region, rather than with European allies that Guyana has traditionally relied on. Barbosa added that Lula shares this interest.

In her comment in the cable, Kubiske said “This type of binational energy project is of growing interest to the GOB, despite recent troubles with the Paraguayan insistence on receiving higher rates from Brazil for energy from the Itaipu dam, to which Brazil ultimately agreed.”  She added that not only is Brazil looking to expand its energy generation capacity, “the political efforts are also in keeping with Lula’s philosophy of building bonds with neighbouring countries through interdependence for energy security and building a South American political bloc, through which Brazil can conduct harmonious regional relations while building a base of support for its larger international ambitions.”

In his speech in Georgetown last year at the National Cultural Centre, President Lula had said that his successor Dilma Rousseff is ready to advance and expand the bilateral agenda with an immediate focus on Guyana’s hydro project and the paving of the Linden-Lethem road. Brazilian funding is available to advance both projects, he said, noting that they are “ready to support the move to the next phase” as both governments work towards cleaner and cheaper energy. He identified movement in these areas as  critical as Guyana and Brazil strengthen their close partnership.

Jagdeo and Rousseff have not thus far had any detailed meetings on these areas.

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