Pivotal review of Amaila hydro project still to begin

The review of the financial model of the Amaila Falls Hydropower Project (AFHP) is yet to begin but it will be completed by the end of the year, Minister of Natural Resources Raphael Trotman says.

“We’re at the stage of having Norway make the final determination and we have, in fact, settled the terms of reference about two weeks ago, IDB, Guyana and Norway,” he told Stabroek News on Thursday. “Norway will tell us when they’re ready to proceed but the ball is in their court now. But certainly before the end of this year, that review will be finished,” he said.

Trotman noted that Guyana had identified Norwegian firm Norconsult as the company that it is comfortable with to undertake the project but Norway, based on its own laws of transparency and bidding rules, did not want to just go with that choice. “We’re in the process now of having them finalise the firm that will do the actual review,” he said.

Last month, the Ministry of the Presidency had announced that Norconsult was selected by Guyana to review the financial model of the AFHP, the results of which would determine whether the controversial project will go ahead.

“A decision was recently made to utilize Norway’s largest consultancy firm Norconsult for this review. With over 50 years of international experience in power generation and energy supply engineering, the Ministry of Finance and Cabinet considered it the best option for an objective re-assessment,” it had said in a statement.

It noted that the decision follows up on one taken by Guyana and Norway in Paris, France, in December 2015 to conduct a review of the project’s current financial model, which the government believes could shackle many generations of Guyanese to debt.

Both sides are awaiting the study on the contentious AFHP to make a definitive decision on how to proceed. The AFHP was the flagship project of the five-year forests protection partnership –which ended last year – between Guyana and Norway in which Guyana could earn up to US$250 million in performance-based payments based on an independent verification of Guyana’s deforestation and forest degradation rates and progress on REDD+ enabling activities. REDD+ is a global initiative that aims to reduce greenhouse gas emissions from deforestation and forest degradation.

Norway had transferred US$80 million to the Inter-American Development Bank for the project but 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 previously urged the APNU+AFC administration to consider the merits of the AFHP and indicated that Guyana stands to lose the US$80 million 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. It had strongly supported the project under the previous PPP/C administration.

Subsequently, both sides agreed to a final, independent review of the project.

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