Jagdeo accuses gov’t of deception over Amaila Falls hydro

-wants reasoned conversation on project

Opposition Leader Bharrat Jagdeo yesterday accused government of deception on the Amaila Falls Hydropower Project (AFHP) and called on the David Granger administration to join in a “conversation” about the project based on reason.

“Finance Minister Winston Jordan is wrong when he says that Amaila Falls will cost GPL US$2.6 Billion over 20 years – in fact, it will save GPL US$2 Billion, or GY$400 Billion, over 20 years; the Government is wrong when they say that the IDB agrees with their plans to shelve Amaila Falls. Accessing affordable electricity is the right of all Guyanese – they should not become victims of political vindictiveness on the part of the government,” he said in a statement issued by the Office of the Leader of the Opposition yesterday.

Norway recently urged the APNU+AFC administration to consider the merits of the 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.

Bharrat Jagdeo
Bharrat Jagdeo

“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 had told Stabroek News.

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 Development 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.

Last week Minister of Governance Raphael Trotman told Stabroek News that government is looking to have an energy matrix that includes hydro but perhaps not one massive project but a number of projects that can still give the same or more capacity. He said that government wanted to meet Norwegian officials to discuss a number of matters.

In his statement yesterday, Jagdeo accused the government of acting irresponsibly. According to him, Jordan had said that government’s “investigations” had revealed that GPL would be required to make annual payments amounting to US$130 million to the operators of the hydro facility, which will total US$2.6 billion over 20 years. He also quoted Jordan as saying that government’s plans to not proceed with Amaila Falls were “strongly supported by the experts at the Inter-American Development Bank, who had considered the project to be too risky to attract the Bank’s financing.”

According to Jagdeo, various versions of this position have been repeated by other members of the Government over months, including the comments in recent days by Trotman. The position has been echoed by non-governmental organisations and sections of the media repeatedly, he added.

However, Jagdeo said, it is not the Amaila Falls project that is the “criminal deception.”

“It is the Government’s willingness to mislead the public in pursuit of dubious political ends. This deception will condemn Guyanese to many more years of expensive electricity prices, and is already damaging the competiveness of our private sector and our overall economy. It must be viewed against the backdrop of APNU and AFC Government Ministers awarding themselves a 50% pay rise while also receiving free electricity,” he said.

According to him, the PPP/C will not stand by while lies are spread about the best chance Guyanese have had for generations to access affordable, clean, reliable electricity.

“So today, I call on the Government to join with the PPP/C in a conversation around Amaila Falls that is based on reason and globally credible analysis,” he said.

The opposition leader declared that Jordan should set the record straight, and apologise for his inaccurate remarks to the National Assembly concerning Amaila Falls.

“Then, if he and other Members of the Government still want assistance, we stand ready to help them improve their understanding of the project. But if the Government does not want to join with us, we will instead take the discussion on electricity prices and the cost of living to the people of our country, village by village. We will explain the facts on Amaila Falls. We will explain that the Government is being deceptive when they say that GPL will have to pay the operator of Amaila Falls US$130 million per year, totalling US$2.6 billion over 20 years,” he said.

According to Jagdeo, the figure was not to be US$130 million per year, it was to be approximately US$100 million per year and that would have bought about 50% more power than GPL’s entire generation in 2012. To generate that much power without Amaila Falls would cost GPL almost $200 million using 2012 costs, he said.

“So rather than Amaila Falls costing GPL US$130 million per year, it is saving GPL US$100 million per year – or put another way, Amaila Falls will generate 50% more electricity than was generated in 2012, for about half the cost,” the opposition leader said.

“In short: Instead of Amaila Falls costing GPL US$2.6 billion over 20 years, GPL would actually be saving almost US$2 billion, or GY$400 billion, at 2012 prices,” he argued.

He said that the opposition party will explain in detail how these savings can enable the costs of electricity to be dramatically reduced for Guyanese, and also explain how after 20 years, the Amaila Falls Hydropower facility will be wholly owned by the citizens of Guyana without any debt being incurred.

“Today’s low oil prices provide an ideal backdrop to move quickly with Amaila Falls, and to use the time of low oil prices to prepare for when they start going up again – as all global experts predict that they will. There is no more time to lose. That is why we want a discussion that will help the people of Guyana to look at Amaila Falls for themselves, and we will welcome the Government’s participation in this discussion,” he asserted.

Jagdeo said that it is only right that the Government first sets the record straight, and reiterated his call for Jordan to state publicly what the net gains to GPL will be over the first 20 years of its operations, and to accept that his claim that Amaila Falls will cost GPL US$2.6 billion was wrong. He also called on Cabinet to confirm that they did not receive any communications from the IDB confirming that the project was not feasible.