Gov’t seeks opposition support to get legislations passed in support of Hydro-Electric project
The Finance Minister Dr. Ashni Singh was rounded up by the ruling PPP/C to defend the need for the Amaila Falls Hydro Project, which the Government says will produce double the amount of electricity being generated now, make cheap, reliable energy available for businesses and potential investors, and for the poor and vulnerable – a lower electricity rate.
At least that was what the Minister spoke of when he offered opening remarks at the PPPs press conference earlier today.
When the Minister was asked to back up on that statement and to say on what basis he was guaranteeing that electricity rates will come down, he offered a shift in position.
The state-owned Guyana Power and Light (GPL), company will pay about $100 million US a year for the power coming from Amaila, and there is no absolute guarantee that electricity rates will come down.
And then there is concern that the weather pattern could bring along droughts that would disrupt power generation, forcing GPL to resort to its current mode of generation. The International Monetary Fund had earlier urged “careful consideration of the [financial] risks” of the project.
Building the hydro project is estimated to cost $840 million US dollars – the most expensive project ever to be undertaken in this country.
A Chinese bank and the Inter-American Development Bank say they will finance the project, but not until certain things are clear.
The Inter-American Development Bank is currently studying the project before it goes ahead and approves its loan.
The Government has told the IDB that it expects to tailor the necessary laws to ensure that the loan agreements can go through.
Specifically, the Hydro-Electric Power Amendment Bill seeks to give the President the power to create a Hydro Electric Offset reserve Area and to increase the penalty to one million dollars if the law is breached.
The Government is also seeking to increase the debt ceiling on external loans so as to ensure GPL can buy the power coming from Amaila Falls.
The Government has told the IDB it expects to have Parliamentary closure to the issue by the end of this month. If that happens, only then the project can flow.
The Government is uneasy about the potentially tough fight it faces in the National Assembly Thursday. Opposition Parliamentarians are not clapping their hands and jumping up and down to support the two pieces of legislation related to the project.
The AFC has said it will not support the legislation unless the IDB says that the project is feasible and will go ahead to approve funding. The Government believes Parliamentary approval would give a positive signal to the IDB.
The Government hopes for financial closure of the project by the end of this year.