in China, Guyana, Norway

Norway hands over US$80 million to increase deforestation in Guyana

Norway has transferred US$80 million to the Inter-American Development Bank as part of the Norway-Guyana US$250 million REDD deal. Perhaps surprisingly, if Guyana spends the money it will involve the destruction of a large area of rainforest.

The money is part-funding for the 165 MW Amaila Falls hydropower dam, deep in Guyana’s forest.

Per Fredrik Pharo, head of the Norwegian International Climate Forest Initiative (NICFI), explained to Development Today why the money has been transferred:

“Payments for results is a sufficient reason to disburse grant contributions for the Norwegian Climate and Forest Initiative … It was not considered an alternative to keep the funds in Norway. Guyana and Norway have agreed that these funds are dedicated to the implementation of Guyana’s Low Carbon Development Strategy of which the Amaila Falls hydropower project is a part.
“Norad has evaluated the development effect of Guyana’s Low Carbon Development Strategy and identified Amaila Falls to be of great importance to the success of this strategy.”

Norad clearly needs to take a closer look at the Amaila Falls project. The reservoir will flood an area of more than 2,000 hectares of forest. But more serious in terms of the impact on people and forests is the construction of a new access road that will open up previously remote forest.

The access road will lead to increased logging and mining with serious impacts for the indigenous Patamona people who live in the area. In June 2014, the Amerindian Peoples’ Association and the Forest Peoples Programme produced a report looking at the treatment of indigenous peoples’ rights under Guyana’s Low Carbon Development Strategy.

The report highlights the following key issues and concerns with the Amaila Falls project:

  • Community consultations on the Amaila Falls Hydropower Project have so far been superficial
  • Flawed impacts assessments have downplayed indirect risks of severe negative consequences of dam development in a remote forest area
  • Access roads risk opening up Patamona lands and old growth forests to intensive logging and mining that would generate deforestation, environmental pollution and major social and cultural upheaval
  • Construction works have started without the prior agreement of affected communities
  • The project does not meet the sustainability standards of the World Commission on Dams and is not compliant with the Norway-Guyana MOU on low carbon development and REDD+
  • The Amaila Falls Hydropower project is part of the larger transnational Initiative for the Integration of the Regional Infrastructure of South America (IIRSA), which risks causing major potential impacts on indigenous peoples in Region 8 and throughout Guyana

Recently, Atle Andersson, a journalist with Norwegian newspaper Bergens Tidende travelled to Guyana to investigate the proposed dam. He travelled to Chenapou, a small village close to the dam site. The Patamona people told him clearly that they oppose the project:

“It’s not nice to deprive us of our rights and our way of life.”
“It is not kind to rob us rights to land that means a lot to us. We use these areas for fishing, hunting, and other activities.”
“The hydropower plant is not good for us. This is our hunting grounds. We are also looking for gold in these areas.”
“They said it is too expensive to lay power lines to us, although Chenapou is one of the villages closest to the dam.”
“There have been some people here and told many nice things about the plant, but we were never asked our opinion. There was no consultation, we were only told about the plant. They said we could find more information online. But there is no one here who has internet.”
“This major project is negative for our ability to continue our way of life in the future. Also places that are sacred in our culture will be affected by this development.”

Guyana’s Environment Minister, Robert Persaud, denies that communities have not been consulted about the project and argues that the dam will have minimal impacts. He told Bergens Tidende that,

“This is one of the most environmentally friendly hydropower plants in the world. Cooperation and support from Norway reflects how green this hydropower project will be.”

In a brief response to the article in Bergens Tidende, Norway’s State Secretary Lars Andreas Lunde at the Ministry of Environment, explains that the environmental consequences of the project have been “thoroughly investigated” and that several rounds of consultations have been carried out with indigenous peoples.

Lunde appears not to have read the statements from indigenous people living in Chenapou about the lack of consultation about the proposed dam.

There are more concerns with the dam. During the dry season the dam will run at less than capacity, and during droughts it could stop generating completely. El Niño weather patterns can result in year-long droughts. Guyana has faced severe and prolonged droughts in 1988, 1992, 1998, 2003, 2005 and in 2009-2010. This calls into question the rationality of relying on the Amaila Falls hydropower project to generate electricity to replace diesel generators on the coastland.

In 2013, the project developer, Sithe Global pulled out. Brian Kubeck, Sithe Global’s President, told the Stabroek News that the project was too big to continue without the approval of all three parties in Guyana’s Parliament.

When Sithe Global pulled out, the Inter-American Development Bank stopped its due diligence on the project. The project is not in the Bank’s project pipeline.

Allegations of corruption surround the project. The price tag of the dam has rocketed from US$325 million in its early stages to US$915 million. It would be Guyana’s most expensive project ever.

The company with the contract to build the hydropower plant, the access road and transmission lines is China Railway First Group. In October 2014, Norway’s Council on Ethics recommended the exclusion of China Railway Group from investments by Norway’s Government Pension Fund Global “due to an unacceptable risk that the company is involved in gross corruption”. China Railway First Group is a subsidiary of China Railway Group.

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  1. I’m delighted to see that Mr Pharo is following in the best tradition of linguistic dissimulation, indeed his use of it is better even than fiction.

    So “payment for performance” does not mean “non-payment for non-performance”. Of course, how could we not have realised this before?!

    Everything is possible if you try hard enough, isn’t it, Per?

  2. The way that the land rights Amerindian communities across Guyana have been set aside in favour of projects is nothing new, and each time illegal logging and gold mining has increased at the expense of the livelihoods of these communities.
    At the moment the parliamentary process has been suspended, but after the May 11th election,a different political party in power after 22 years could(!!) be more in sympathy with the rights of the Patamona people