Given the expected doubling of electricity demand in 10 years and the accompanying need for the power company to improve its technical and managerial capabilities, an IDB-funded study will look at GPL in its entirety.
This is according to Inter-American Development Bank (IDB) Representative in Guyana Sophie Makonnen.
The IDB decision to carry out the study will likely lend more weight to opposition concerns that in its present state the Guyana Power and Light (GPL) faces serious managerial and technical issues and is not adequately prepared to be the conduit for the massive power supply expected from the long-awaited Amaila Hydropower project. It may yet be the most comprehensive study done of the power company. The planned assessment was not announced by the government.
On May 31st, the Bank advertised for bidders for the project and the closing date for the submission of tenders was June 14th, 2013. In the invitation for bidders, the Bank stated that the Govern-ment of Guyana has received financing, part of which is to be used under the project Guyana Power and Light Inc. (GPL) Corporate Assessment for consulting services to conduct a comprehensive review into the company.
In an email in response to questions, Makonnen told Stabroek News that “the study is part of Technical Assistance (which is a non-reimbursable funding) granted to support project preparation in the energy sector in Guyana, since Sustainable Energy is part of priority areas of the Bank’s strategy in Guyana.”
She noted that “GPL is expected to deal with a significant increase of its customer base and an electricity demand that will almost double in the next ten years.”
Makonnen said that the projected increase will require the power company to improve its technical and managerial capabilities to deal with such growth. These issues will have to be tackled while solutions are sought to address several other key challengers, said Makonnen.
“Such challenges include electricity losses (currently above 30%), generation costs, and the need to execute intensive investments to rehabilitate or upgrade a large portion of its aged and overloaded transmission and distribution network,” she added.
The company has constantly said that the high prices of fuel continue to dig into their profits. The company’s Deputy CEO Aeshwar Deonarine just this year disclosed around 80% of the company’s expenditure was used to procure losses. He also said that much of GPL’s equipment was very old and needed replacing.
Makonnen said that “in view of the current and future challenges the support of the Bank intends to address GPL’s organization as a whole to identify how to improve its operational efficiency and corporate performance, including key areas, such as planning, procurement, operations, network maintenance, and financial management, through the implementation of best systems and practices.”
Meanwhile, Prime Minister Samuel Hinds added that the review would also assess the company’s readiness to handle power from the Amalia Falls Hydropower Project.
In a reply to Stabroek News’ questions, Hinds said “from the inception of declaring the development of the Amalia Falls, it was anticipated that the reviews of GPL would include determining and assessing GPL’s ability to receive and properly manage hydroelectric power from Amalia.”
He said reviews have been a regular occurrence since the bank began supporting the electric utility in Guyana in the mid 1980’s.
The cost of the study, according to Makonnen, will result from a competitive bidding process and it will be made public following Bank’s policies.