Guyana’s Amaila Falls dam in doubt as Sithe Global pulls out

Earlier this month, newspapers in Guyana reported that Sithe Global had pulled out of the Amaila Falls hydropower dam. Sithe Global’s President Brian Kubeck told the Stabroek News that the project was too big to continue without the approval of all three parties in Guyana’s Parliament.

The 165 MW Amaila Falls dam is one of the few projects under Guyana’s Low Carbon Development Strategy. US$80 million was supposed to come from Norway’s Guyana REDD-Plus Investment Fund (GRIF). The most recent Summary Status of GRIF Projects dated 20 August 2013 makes no mention of the Amaila Falls dam project. The project is however, still listed on the GRIF website.

In a statement, Brian Kubeck, the President of Sithe Global explained that,

Sithe Global cannot continue its development efforts without the same level of commitment from our partners in Guyana. We can only proceed further if there is uniform consensus in Parliament that you support this project.
 
Without such consensus, Sithe Global will be forced to withdraw. This is simply an acknowledgement that, after US$ 16 million and six years of intense effort by Sithe Global to progress the project, the country is not prepared to proceed.

The bill for the dam has steadily increased. In the early 2000s, the estimated cost was US$325 million. The most recent estimate is US$915 million.

For such an expensive project, surprisingly little information has been made public. The Economist magazine recently described the project as “shrouded in secrecy” and pointed out that “If Amaila is as beneficial as its backers claim, an open debate might generate broader support for the project.”

In July 2013, Sithe Global produced a public presentation about the project, just before announcing that it would not be going ahead with the dam.

Even the appearance of the proposed dam is uncertain, as these four artists impressions show (clockwise from top left – China Railway First Group, Guyana Government, Sithe Global, Guyana Government):

Earlier this week, the Minister of Finance, Dr Ashni Singh, announced that the Inter American Development Bank (IDB) has stopped its due diligence that it was carrying out on the project.

“The IDB’s due diligence has now ceased, and without it, the public review of the project cannot take place…. However, it is particularly unforgivable to prevent the public from having the final say…. Once politics was stripped away, the people could have had access to factual information, and had time to digest the details, rather than having politicians or letter-writers claim to speak for them.”

Dr Singh blamed the opposition party A Partnership For National Unity (APNU) for not approving the project.

“[U]nless we see a rapid and radical change in APNU’s willingness to let the IDB do their work, and to let the people of Guyana have their say during the six week public review process, it seems that the project has died.”

Also this week, Norway announced that it has delayed the latest payments under its US$250 million REDD agreement with Guyana. Per Fredrik Pharo, Director of the Norway’s International Climate and Forest Initiative told Stabroek News that,

“Given the uncertainty to the further funding mechanism of the partnership, we have made a consensual decision to delay the pay-out while working on improving the financial mechanisms…. However, important lessons have been learned and we believe that it is possible to find good solutions. We don’t have any plans towards phasing out the GRIF.”

A major part of the problem is that the President’s Office of Climate Change has failed to produce project concept notes for the various projects under former-President Bharrat Jagdeo’s Low Carbon Development Strategy. Pharo said that,

“It is correct that according to general rules for disbursement of funds set by the parliament, money cannot be disbursed until a significant portion of the money in the GRIF is utilized. This is a technical aspect of the parliament’s general rules, and not special for Guyana.”