Tumatumari hydro upgrade stalled

…local banks not keen to act as intermediary

The Caribbean Develop-ment Bank (CDB) was willing to provide financing to upgrade and operationalize the Tumatumari hydropower facility but the funds needed is below the minimum the bank lends and the project is stalled as local institutions are unwilling to act as the intermediary.

Local engineering company, Dynamic Engineer-ing Company Limited of Eccles was spearheading the rehabilitation of the long-defunct hydroelectricity station in Region Eight (Potaro/Siparuni) as part of a wider plan for industrial development in the area. Work had begun in 2010 but halted in early 2012 owing to financial difficulties.

The stalled project came up during a recent meeting of the Low Carbon Development Stra-tegy steering committee during which it was noted that the facility had great promise and was working up to 1990 and had provided 1MW of electricity and there is now a consortium to rehabilitate and get the plant to produce up to 2MW. It was noted that should the project come on stream, the government will not have to provide fuel for the Mahdia sub-Region.

According to the minutes of the meeting, it was stated that the CDB is willing to lend the money so that the hydro facility can be upgraded and operationalised. “However, the amount of money needed is below the minimum the bank lends. Therefore, it is requested that a local bank act as an intermediary. The CDB has spoken with all the banks in Guyana except Scotia Bank but none has accepted. For this reason only, the project is stalled,” it stated.

It was stated that the Ministry of Finance can use its influence to advance the project since the project is part of the overall LCDS plan. According to the Minutes, Prime Minister Samuel Hinds was told of the project and he indicated that he supports it. “One proviso is that the GoG will not be liable to guarantee payments by the Mahdia Power Company to the Tumatumari Hydro Authority and this is understandable.

The Mahdia Power Company has to ensure customers pay for their electricity,” the document said.

It stated that the question was asked whether   the Project Management Office (PMO) can utilise the Guyana REDD+ Investment Fund (GRIF) to finance the Tumatumari hydropower project. The response was that the project seems viable but presently, the PMO only deals with the projects identified within the LCDS and a directive from higher office will need to be given for the PMO to pursue the venture being funded by the GRIF.

Dynamic Engineering had carried out extensive repairs on the Tumatumari hydro facility and conducted a preliminary test run while parts sourced from overseas were installed. In December 2010, a preliminary test was done to demonstrate that the hydroelectricity station can operate with the main equipment that had been installed over the years; namely, the water turbine, gear box and other civil infrastructure. But it could not continue owing to the need for critical parts which were later sourced and installed before the project dovetailed.

Principal of Dynamic Engineering, Lloyd Rose had said in an interview with Stabroek News in February 2011 that full rehabilitation of the hydroelectric station would have started later that year and was scheduled to be completed within a year of commencement.

His company spearheaded the hydroelectricity component of the Tumatumari Industrial Development Project and apart from this core project, three other industries, on the basis of reliable, affordable power from the hydro, were envisioned. These are lumber processing, mineral processing and the production of dimension stone or block granite.

Rose had said the hydroelectricity station has the capacity to generate 2 MVA (mega volt ampere) of power, which is close to 2MW.

The hydroelectricity station at Tumatumari Falls on the Potaro River was the first hydropower station in Guyana and was constructed by British Guiana Consolidated Goldfields Limited to power two large dredges for gold mining there and at Konawaruk in the mid-1950s. It was said that it had an installed capacity of 1500kW and used 2 x 750kW Francis turbines. Following a prolonged workers’ strike, the operations were closed in the early 1960s but put back into use in 1976 by the Guyana National Service (GNS) to supply power to its administrative centre and other activities. Up to 1987, one turbine functioned. It is 241 feet above sea level.

Rose had told Stabroek News that based on the successful completion of the first test; they would have moved to acquire the necessary financing to fully rehabilitate the station. He had said that some financing would be coming from the group of initial investors already involved in the project but they are also looking for other strategic investors as well as loan financing from the capital markets. Rose had declined to say what the estimated cost of the rehabilitation would be but revealed that just under US$100,000 had been invested up to February 2011. However, he had said it was anticipated that the total investment in the entire industrial project would be in excess of US$3 million.