Norconsult report really about how to spend US$80m in Norway funds – Patterson

Minister of Public Infrastructure David Patterson says that the Government of Guyana will make a pronouncement this month on the recommendations of the Norconsult report which has come down heavily in favour of continuing with the Amaila Falls Hydropower Project (AFHP).

Speaking at the Ministry of Public Infras-tructure’s (MPI) 2016 performance review yesterday, Patterson said that with respect to the way forward, “…Very shortly, this month, we do intend to say to them (the Kingdom of Norway) this is how we should utilise the funds.” Patterson said that the idea should always be to be progressive and continue moving in parallel with the other studies and interventions.

“The question of the Amaila Falls and the Norconsult report has entertained the media for the last week. Of course everyone is allowed to make their own opinions but I want to state a few things which I do not think has been clearly stated in the media,” Patterson said.

He said that the reason behind Norconsult doing the report did not stem from the feasibility of the AFHP and that “no one is questioning the viability of the project at Amaila…The question of Norconsult was a question of what happens to the US$80M which the people of Guyana would’ve earned (from the forest protection deal with Norway) and which is still in an account from the IDB [Inter-American Develop-ment Bank],” he said, while pointing out that the agreement was slated to expire last year December 31.

David Patterson

Patterson’s interpretation of the reason behind the Noronsult report appears to be different from how it was always presented to the Guyanese public i.e. to conduct a final, facts-based assessment of the AFHP. This has led to the belief that since the report gives a positive evaluation of the project that it will go ahead.

The US$80m which Patterson spoke about was intended to form part of the Government of Guyana’s equity contribution to the AFHP project. It is now left to be seen if Norway will insist that it must be assigned to the Amaila project or could be used for other green energy ventures. Guyana and Norway had agreed on the hiring of Norconsult for the review.

Patterson told yesterday’s forum that the government was exploring other ways of utilising the money while the research and work was being carried out on the AHFP. “…While Amaila is a very good project which can be explored it was not the only option.

Further, the Government of Guyana had indicated to the Kingdom of Norway that the time that has elapsed and the time that would be required to resuscitate the project was against us and that we were keen on establishing a green energy fund with the US$80M,” Patterson said, while pointing out that the idea was to have government agencies and other private entities apply for a grant to use to money to foster their own green energy programmes.

“…So the Government of Guyana was thinking that while we are finalizing and while we are working on the project we should not be stagnant and marking time and that was the genesis under which the Amaila Falls project review was undertaken,” he pointed, while stating that the project also highlights several issues which the government is concerned about and has openly stated.

Patterson also contended that the Amaila Falls site was not the “best” option out of the five sites that are being evaluated, but the more advanced one. “Amaila is the one being favoured… is the one that is most advanced,” he said.

Silver bullet

He added that while the plan is to get to 100% renewable energy in 10-12 years, in order to sustain that, other sources of energy will have to be explored. “The conversation is not Amaila or no renewable energy. Amaila is not the silver bullet in the gun,” he asserted.

In Norconsult’s December 12, 2016 report, it was stated that the AFHP is the fastest way forward for Guyana to realize its green energy ambitions.

Aside from hydropower being the best green energy project for the country, Norconsult pinpointed Amaila as the best hydropower prospect and adverted to 2012 findings by Verlyn Klass. Norconsult said that Klass did an evaluation of the known alternatives and the larger ones were resized to match the projected energy demand here.

In addition to the Amaila Falls, Klass’ study considered the Kaieteur Falls, Turtruba Falls, the Upper Mazaruni, Arisaru and Oko Blue. Based on technical/economic/environmental/social considerations, Amaila scored 100 in the rankings. Kaieteur Falls was next with 74 with Turtruba at 57 and Upper Mazaruni at 47.

Norconsult said that a more recent study, ‘Guyana’s Power Generation System Expansion Study’ by Brugman SAS (June 2016), also concluded that hydropower is the lowest cost option. This study pegged Amaila Falls as the second lowest cost option of the hydro plants in the study, slightly higher than Tumatumari. However, the Tumatumari Project has a significantly lower plant load factor – 50 to 55% versus 70-75% for AFHP. This means that more back-up capacity would be needed if Tumatumari was chosen.

Norconsult added “The Tumatumari reservoir would inundate 6-20 times larger area than the planned reservoir of AFHP with more extensive environmental projects”.

In addition, the studies for Tumatumari from the 1980s need to be raised to a feasibility study level including environmental and social impact assessments. Norconsult said that Tumatumari may therefore be better suited as the second hydro development in the country as its location is suitable for sharing the transmission line with AFHP.

The report also said that “By restructuring the financial model, the risk for Guyana’s economy can be reduced. The annual payments from GPL may possibly be reduced by 20%, which are significantly lower than the current fuel costs paid by GPL for its oil fuelled generation.

The risk to Guyana’s economic stability would be at the same level with other projects generating the same amount of energy, as the investment would be of a similar magnitude”.

While in opposition, APNU and the AFC- which now comprise the government had been deeply opposed to the AFHP on a variety of grounds including the lack of transparency, its cost and the final tariff to consumers.

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