Sithe Global cannot continue its development efforts without the consensus of the PPP, APNU and AFC

Dear Editor,

Sithe Global would like to thank the members of Parliament and the members of the Guyanese public who attended our Amaila Falls Hydropower Project (“Project”) information workshops, which were conducted on July 31.  We further express our appreciation to all Guyanese, supporters and opponents alike, who have a stake in ensuring that the country makes an informed decision about proceeding with the project.  The extensive public dialogue was evidence of your vibrant democracy and commitment to a comprehensive understanding of the project.

Sithe Global strongly believes that the project will have lasting and profound benefits for the country by delivering improved electricity reliability and cost savings versus the status quo.  The maths is simple.  In 2012, GPL’s cost of generating electricity was over 19 US cents / kilowatt hour (kWh).  This price is amongst the highest prices paid for generated power in any part of the world.  Government subsidies currently reduce the ultimate impact on the tariff paid by GPL customers, but these subsidies come from your tax dollars.

In its first twelve years of operation, the Amaila project is expected to generate savings of 40% or nearly US$1 billion (G$200 billion) compared to GPL’s 2012 cost, as the project’s tariff is expected to average approximately 11 US cents / kWh.

In years 13 to 20 of operation, the Amaila project is expected to generate savings of 70% or US$1.15 billion (G$ 230 billion) compared to GPL’s 2012 cost, as the project’s tariff is expected to average approximately 5.5 US cents / kWh.

After year 20, the project is transferred to Guyana for free and will generate savings for Guyanese ratepayers of over 90% or nearly US$15 billion (G$3 trillion) over the remaining 80 year life of the Project compared to GPL’s 2012 costs, as operating costs are expected to average less than 2 US cents / kWh.

All of the above assumes that fuel costs never go up for the next 100 years.  If fuel prices do go up, the savings go up further.  The analysis further ignores the secondary benefits of cheap, reliable electricity, which will support higher GDP growth for Guyana.

The Amaila tariffs calculated above are in accordance with the Power Purchase Agreement between GPL and Amaila Falls Hydro Inc, which is consistent with the project costs presented to the public last week.

Our public presentation is available on our website ( and we encourage you to view it.

A number of additional questions have been raised subsequent to our workshop.  As a result, we have started a “Q&A” page on the website.  If you have a question about the project that has not already been posted, please email it to [email protected]

Sithe Global has spent 6 years and US$16 million to develop this project because we believe that it will be transformational for Guyana in many ways. In addition to providing reliable electricity and substantial cost savings, the project will generate hundreds of local jobs, having significant economic impact on the country.

The project has been vetted by numerous third-party firms and has been determined to be Guyana’s “least cost” power option.  Bids were sought and received in a transparent and fair process by five international construction firms with the lowest cost contractor, China Railway, chosen.  The technical development of the project is done – design drawings supporting the start of construction are complete and have been reviewed by two independent parties (including MWH Global, one of the world’s leading hydropower design firms) in addition to China Railway.  The Inter-American Development Bank and China Development Bank are completing due diligence and preparing to seek final internal approvals by the end of October.

However, Sithe Global cannot continue its development efforts without the same level of commitment from our partners in Guyana.  We can only proceed further if there is a uniform consensus amongst all of PPP, APNU and AFC, communicated via Parliament, that you support this project.  Without such consensus, Sithe Global will be forced to withdraw.  This is simply an acknowledgement that, after US$16 million and 6 years of intense effort by Sithe Global to progress the project, the country is not prepared to proceed.  The unfortunate consequence is that it would be many years before any similar project could be resurrected and, as such, Guyana would remain saddled with a 19 US cent cost of power and complete exposure to fuel price swings for imported oil.

It would be our honour to work with Guyana to carry through this important public-private partnership, if we have the collective support of our future partners.  We hope you are willing to take this momentous step towards securing reliable, low-cost energy that will help fuel Guyana’s economy for generations to come.

Yours faithfully,
Brian Kubeck
Sithe Global

Around the Web