Norway urges gov’t to consider pros of Amaila hydro project

-as clock winds down on availability of $16B funding

Norway has urged the APNU+AFC administration to consider the merits of the Amaila Falls Hydropower Project (AFHP) since Guyana stands to lose over $16 billion previously earmarked for the project if it fails to come up with a plan for “transformational” renewable energy sources that can be realised in the next few years.

“The merits of the Amaila Falls project should be considered by the Government of Guyana. Norway is a strong supporter of transforming Guyana’s energy sector and significantly reducing energy-related emissions. We see this as a fundamental part of the Guyana-Norway partnership,” Director of Norway’s International Climate and Forest Initiative Per Fedrik Pharo told Stabroek News last week.

He said setting the direction for Guyana’s energy future is up to government but urged, as part of that process, “a comprehensive, facts-based revision of the Amaila Falls project by the Government of Guyana, so as to establish a proper basis for any decision.”

The David Granger administration has said that as currently configured, “it would not only be irresponsible, but a downright criminal act of deception,” if government proceeded with Amaila.

Norway had strongly supported the AFHP, the flagship project of the previous PPP/C administration’s Low Carbon Development Strategy (LCDS,) which was envisioned to deliver a steady source of affordable, reliable, clean and renewable energy. The project was supposed to eliminate at least 92% of Guyana’s energy-related greenhouse gas emissions and it was said that this would likely make Guyana the world’s number one user of renewable energy by 2017.

However, Minister of Finance Winston Jordan, while presenting the 2015 National Budget to the National Assembly on August 10th, said currently the cost of financing the AFHP is too high and the Inter-American Develop-ment Bank (IDB) considered the project too risky to attract the bank’s financing. Guyana was seeking partial financing from the IDB.

Jordan’s declaration would seem to be the end to what was the former PPP/C government’s most ambitious project to diversify energy sources and what would have been the most expensive in the country’s history.

Norway had transferred US$80 million to the IDB as Guyana’s equity in the project. The money was earned under the forests partnership between Guyana and Norway under which Oslo would pay up to US$250 million up to this year based on Guyana’s efforts in protecting its forest and meeting enabling indicators. Guyana has so far earned US$190 million, with US$69.8 million transferred to the World Bank administered Guyana REDD+ Investment Fund (GRIF) and US$80 million to the IDB for Amaila. US$40 million remains in Norway with the final year of the partnership -2014- still being assessed.

The Granger administration has spoken of a ‘green’ economy numerous times but to date has not articulated a comprehensive strategy for renewable energy.

Minister of State Joseph Harmon, when contacted, told Stabroek News that Guyana is working on several projects to utilise the money. “Actually, for renewable energy what we are doing now is getting help to forward projects that will utilise that money…the money will be utilised,” he said, while adding that the intended projects would be transformational. He identified wind, solar, and hydropower, as being among the renewable energy projects being considered. He said Norway has also volunteered its expertise in formulating these projects and government will accept the help. He also said that it was not his understanding that Guyana would “lose” the money if it does not come up with a project.

However, Pharo told Stabroek News that, as agreed between Guyana’s previous government and Norway, the US$80 million was dedicated to the Amaila project and will be transferred back to Norway if it is not used.

Asked, if Guyana does not have a say in how the money is used since the money represents payments earned, Pharo pointed to the Memorandum of Understanding (MoU) and said if Guyana comes up with a timely renewable energy plan acceptable to both countries, the money could be used for those projects.

“It is laid out in the MoU between our two countries that the payments from Norway shall be used for low carbon development, including transforming Guyana’s energy sector to renewable energy. As agreed between Guyana’s previous government and Norway, the US$80 million was dedicated to the Amaila project. The money could, if agreed between our two countries, be used by Guyana on other transformational renewable energy sources that can be realised in the next few years, if Guyana should choose to move in this direction in a timely manner,” he said.