US Ambassador to Guyana Brent Hardt is defending his pitch for US investor Sithe Global, saying he tried to get the firm to stay on the US$858 million Amaila Falls Hydro project, which he calls a good investment whose departure does not bode well for the country.
Hardt, in a recent interview with Stabroek News, also chided both government and opposition for their handling of the project, saying that the government could have been more open and inclusive from the get go, while the opposition needs to assess how it looks at important national projects.
“I have looked for opportunities where my speaking out and giving a nudge in the right direction could help bring people together around a goal that all Guyanese could share, like local government elections, cleaning up the country environmentally, with radio licences – broadening free speech and access, speaking out on combatting trafficking in persons or domestic violence. So when I look at Amaila Falls, to me that was another case of something that was very much in the country’s long-term national interest. We are trying to promote greater use of renewable energy. We are trying to promote an energy independent western hemisphere which is very much within reach,” he said.
“The renewable potential is enormous and Guyana is at a key place where renewable energy could replace what are some of the highest energy costs in the world. You asked whether this was an attempt to support a US company. Do we support a US company? Absolutely. Our mission in all embassies around the world is to try to support our companies and we support US investment and trade,” he further said.
Sithe Global followed through on a threat to exit the Amaila Falls Hydro project over the lack of political consensus, after main opposition APNU failed to support enabling parliamentary measures for the project.
According to Hardt, Blackstone and Sithe are top American companies, which do major projects throughout the world. “…The fact that they were here in Guyana and that they invested six years and US$16 million in trying to make this project work was a huge opportunity for the country,” he said.
“I have no doubt that it would have resulted in lower electricity rates for consumers, it would have made the country more competitive by reducing electricity rates for manufacturers and I think people would have looked at a successful Blackstone/Sithe project and say Guyana is a good place to do business,” he added.
Hardt suggested that the development of the project would have the knock-on effect of more major companies coming in. “Now, because of what has happened it is likely that we see the opposite happen. It would be harder for Guyana to attract those world-class companies that can really deliver a project that would make sure it gets the kinds of return the country wants. This increases the cost of doing business because there are political risk insurers for most projects and now they are probably going to raise the cost of providing political risk insurance. These things will just make it harder and more difficult for international investment to come here,” he said.
“I worked hard in those last couple of weeks when the project was going through parliamentary review and in the aftermath of that to try to encourage the company to give it every chance that it had. But they had made a determination at that point that unless they could get the unanimous assurance of support from all the political parties that they were not prepared to move forward,” the ambassador revealed. “I did even challenge that, telling them to look at projects in our country in different places where getting unanimous support is a high bar. [Sithe] recognised that but pointed out that unlike the projects in the US which represented a miniscule fraction of the US economy, the Amaila project represents 25 percent of the GDP of Guyana. I think they were at a point in the project where they would have to invest substantially more to get the IDB approval and for them to ramp up the project and make that investment they wanted to make sure that no party would have a stake in opposing the project in any new political configuration,” he added.
Despite the outcome, Ambassador Hardt said that he will still encourage companies to come and invest here. “We think Guyana is a good place to do business. We continue to encourage US companies to come here. I have worked to bring companies here in the oil and gas sector, in the mining sector and in the agriculture sector,” he said.
He noted that some American companies have come looking for investment opportunities and decided to go away. “Whenever this happens it is a missed opportunity for Guyana,” he said. “[When this happens] it is always good to step back and say why did we lose that one? How could we have done better? Are our bureaucratic procedures too complicated or long?” he asked.
“This example [of Amaila] really offers an opportunity for people to learn lessons from it and there is no doubt that on the government’s side they could have done more over the course of this investment, which has been six years in the making, to broaden the discussions in the Parliament and create more transparency with what is such a major national project, especially something that is 25 percent of GDP as this would have been,” he said.
“On the opposition side as well I think they need to take a look at how they assess projects. They have very much a constitutional role and an important political role in looking at projects to make sure that they are good value for the country and for the people. That is part of what an opposition must do and should do but they also have to be open to looking at things that are going to be good for the country,” he said.
Hardt noted that in his engagements, he has never heard a clear answer as to why the project would not be ultimately good for the country. “When I look at it as an outside observer, I heard a lot of talk about debt, but you essentially have a project [which will see the reduction of oil imports],” he said. “Right now Guyanese are paying a lot of money to import oil for electricity. It is a huge import bill. Once the hydro power plant is on stream, instead of paying for oil you are paying the companies back for their investment from the money that goes to Guyana Power and Light,” he said.
He noted that once the debt is paid after 20 years, Guyana owns the project and just has to fund maintenance. “How that is not a good deal for Guyana’s development has never been explained to me,” he said. “People have to look at how they make decisions that are going to affect people. It would have been good to have a more open and frank discussion and to really try to pin these things down and not let such an important, transformational investment slip through their fingers after so much work,” he added.