Sithe Global withdraws from the Amaila Falls Hydropower Project – August 11, 2013
Project

Project

Powering Guyana’s Future Development

MapThe Amaila Hydropower Project will generate reliable, affordable and clean energy for the people of Guyana for decades to come. The project is a fundamental component of Guyana’s Low Carbon Development Strategy, and will significantly lower the the Guyana’s carbon footprint while reducing the country’s long term energy costs and exposure to imported oil price volatility. Improved electric power reliability is essential for Guyana’s continued future development.

The Project

The Amaila Hydropower Project involves the construction of a hydropower plant in the area of west-central Guyana, where the Amaila and Kuribrong rivers meet. Electricity produced at the plant will be delivered to Guyana's capital, Georgetown, and its second largest town, Linden, by an electric transmission line. It will take approximately four years to complete.

There are three parts to the Project:

  • Hydropower Plant. Construction of a dam where the Amaila and Kuribrong rivers meet will create a reservoir upstream of the dam. The Project is expected to have the capacity to produce 165 MW of electricity by releasing impounded water through turbines specifically designed and built for the plan.
  • Transmission Lines. Electricity will be delivered from the hydropower plant to Georgetown and Linden through a high-voltage 230-kV transmission line that will be built along with electric substations in Linden and Georgetown. The 270 km long transmission line will be supported on towers approximately 36 m tall and 300 m apart, carrying two circuits thus providing redundancy in the event of loss of one circuit.
  • Access Road. In order to access the Project site, new roads will be constructed and some existing roads will be upgraded. A new road approximately 65 km long will be built connecting the Project site to the existing Bartica-Potaro Road. Another new road approximately 20 km will be constructed from the existing Mabura Hills Highway to the Essequibo River. Other existing roads will be upgraded in order to provide access needed to move the equipment, supplies, and personnel to build the Project, as well as for future operation and maintenance of the plant and transmission lines. Construction of access roads began in 2010 and will be completed in advance of the construction of the Hydropower Plant.

Experienced Sponsors

The Project is being developed by Amaila Falls Hydro, Inc (AFHI), a member of the Sithe Global Group, which is a leader in the international energy industry. Sithe Global's core management team has successfully developed or acquired over 80 power plants in 10 countries totaling over 19,000 MWs of installed capacity. AFHI will lead the financing, management and construction of the hydropower plant and transmission lines - bearing all the development risk for the Project. GPL will own and operate the Project for 20 years, after which, the Project will be transferred to GPL for free, through a Build Own Operate Transfer (BOOT) arrangement.

The construction of the hydro facility and the electrical interconnection will be designed and built by China Railway First Group, one of the world's largest infrastructure construction firms.

After conducting an open tender process, the GoG contracted several road contractors to design, build, and improve the main access road to the Project, and to clear vegetation for a portion of the transmission line corridor. The GoG is responsible for the financing, construction, and operation of the access roads.

Commitment to Environmental Planning and Mitigation

The Amaila Hydropower Project is committed to Guyana's sustainable development vision. Protecting environmental biodiversity and minimizing adverse impacts to local communities are important factors in project implantation. The Project sponsor, AFHI, is taking numerous steps to minimize the Project's adverse impacts and enhance Project benefits.

As part of this commitment, AFHI has updated the Environmental and Social Impact Assessment as a supplement to the previous EIA reviewed and approved by the Guyana EPA. This updated ESIA was prepared to be consistent with Guyanese standards and international safeguard policies. AFHI will continue to actively engage local communities and stakeholders throughout the planning, implementation, and life of the Project.

Environmental and Social Management Plan (ESMP) has been drafted to reflect the final Project design, as well as current environmental and social conditions in the Project area. The ESMP will provide guidance for management activities in the following areas:

  • Environmental and social control and mitigation measures for project construction and operation;
  • Environmental and social monitoring program for both construction and operation;
  • Worker health and safety plan, procedures and controls;
  • Environmental contingency plan and procedures;
  • Environmental, health and safety management system (including personnel, training, documentation, etc.);
  • Public consultation and disclosure.

Social Responsibility. The Project recognizes its responsibility to mitigate social impacts during construction and operation. Some of the actions that will be taken include:

  • Locating worker camps away from local communities;
  • Requiring workers to comply with a Code of Conduct while ensuring fair and transparent treatment;
  • Controlling traffic to the Project during construction; as well as controlling the use of the access roads;
  • Ensuring Amerindian traditional uses and access to land areas near the Project site are maintained;
  • Maintaining communication ties with rural communities in the region of the Project and ensuring an effective inquiry/grievance mechanism is in place; and
  • Working closely with Government agencies and non-government organizations (NGOs) in order to implement certain aspects of the Project.

Benefits for the citizens of Guyana

The Project will provide local communities with employment opportunities as well as the chance to expand the sale of goods and services. Longer term benefits include lower average wholesale energy costs, improved power reliability to meet Guyana's future needs, an economic stimulus to Guyana's economy and consistency with Guyana's Low Carbon Development Strategy. After 20 years of operation, the Project will be transferred to GPL for free.

  • Lower energy costs. The Project will reduce generating costs and therefore lower the retail cost of electricity to the consumer.
  • Low Carbon Development Strategy Advancement.. The GoG has committed itself to a Low Carbon Development Strategy. The Project advances this goal by taking advantage of a key natural resource in the country, its flowing rivers, to generate clean and reliable electricity. Amaila will replace older existing thermal power plants, which use fuel oil, eliminating their carbon (greenhouse gas) and other air quality pollutant emissions.
  • Energy supply for the future. The Project helps assure that Guyana will have enough energy to meet its future needs. The Project will create a double circuit 230-kV transmission network that will form the backbone of a new high-voltage super highway. This is a key factor in helping the country attract foreign investment and encourage local entrepreneurs.
  • Economic Stimulus. The Project will help stimulate the local economy during its 39 month construction, and beyond, as it provides the country with a reliable source of electricity.
  • Benefit Local Communities.The Project is establishing community development programs that, among other things, include using local goods and services and creating local jobs.

Financing

The Amaila Hydropower Project is a private sector-led project in which the Project sponsor, AFHI, bears the development and construction risk of the Project. It will be financed through debt from development bank institutions such as the Inter-American Development Bank (IDB) and China Development Bank (CDB), and with equity from Sithe Global and the GoG. The Government of Guyana is financing the road construction and will have the option to invest equity in the overall project.

Guyana Power & Light does not pay for power until after commercial operation is achieved and independent testing is successfully completed. The Amaila Hydropower Project will be owned and operated by AFH for 20 years, after which it will transfer to the GPL for free through a BOOT arrangement. With proper maintenance, the Project is expected to have a lifespan of 100+ years.