Finance Minister condemns repeat of pre-2015 misinformation campaign against Amaila Falls and other major development projects

Georgetown, Ministry of Finance, February 28, 2022: Senior Minister in the Office of the President with Responsibility for Finance Dr. Ashni Singh today condemned what he termed the misinformation campaign targeting the Amaila Falls Hydropower project and other major development projects as he noted that it is the same campaign which was carried out prior to 2015 and resulted in major projects being stymied while no other alternative was offered by the party which assumed office afterward.

“I want to express in the strongest possible terms my grave disappointment and indeed our government’s grave disappointment at the campaign of misinformation that is being waged in relation to major developmental projects and in particular, most recently, in relation to the Amaila Falls Hydropower project,” the Minister said reminding that the project was subject to extremely detailed studies and analysis by international technical experts and it was examined by international development agencies and bilateral partners such as Norway. He added that it was also examined by international investors.

“In fact, if we were to cast our minds back to the pre-2015 period, we had brought (the then PPP/C Government) the project to a point where we had a major, large, credible international investor who was ready and willing to invest in this project. It would be recalled that the then APNU/AFC used their one-seat majority while in opposition to derail and ultimately to frustrate the project. Had the then APNU/AFC not done so… not only would construction have commenced but construction by now would have been completed and Amaila would have been providing electricity to the National Grid,” The Senior Finance Minister explained.

He noted that what was particularly significant was that the then Government upon assuming office in 2015 commissioned a study to be done by an international consultancy entity (Norwegian Consultancy Agency) Norconsult to complete a study on the project.

“Norconsult did an extensive study and concluded in very favorable terms that the Amaila Falls project was the best option for Guyana to transition to clean renewable energy. That report is publicly available Minister Singh further emphasized while reminding that despite all that, the APNU/AFC government did not proceed with the project, nor did they produce an alternative project. He posited that the PPP/C Government committed to resuming work on the project and completing it once it assumed office once more.

“Let me be crystal clear that the resumption of this campaign of misinformation has one objective in mind-the same objective as the misinformation campaign during the pre-2015 period and that is to frustrate development-to deny the people development as long as the PPP/C is in office,” Minister Singh concluded.

In examining the misinformation on the project, the Ministry of Finance has noted that since the Energy Conference held recently, there have been a series of articles on the Amaila Falls Hydropower project that are either fabrications, erroneous, or lacking in balance and objectivity.

The Ministry of Finance wishes to remind that the Amaila Falls project has been extensively studied and reviewed. Many of the current project risks were exposed to the public since 2012 and were properly reviewed by all partners (including the Inter-American Development Bank (IDB) and due diligence was conducted by expert firms on behalf of the IDB. As recently as 2016, the project was reviewed at the request of A Partnership for National Unity (APNU) by Norway via an independent firm Norconsult. The current project, taken as a whole, based on independent reviews and analysis, manages risks prudently. The project also represents a clean, renewable means of electricity with significant financial savings for Guyana.

Hydrology:

In the February 22 edition of the Kaieteur News, the newspaper published an article headlined “GPL liable when Amaila Falls run dry”—Winston Brassington. Firstly, the above was never said by Winston Brassington and therefore the headline was a total fabrication and an erroneous statement. Winston Brassington referred to hydrology risk being assumed by GPL, as off-taker, a position reviewed and supported by consultants, as articulated below. No reasonable extrapolation can equate the KN headline to what was stated by Mr. Brassington. The fact is Amaila will have a 23 KM 2 reservoir to hold water and this reservoir allows the hydro optimized delivery of energy on an annual basis. Secondly, dating back to 2012, all Parties considered the hydrology assumption that Amaila can deliver 1,050 GWH energy on average per annum, a reasonable number (if not conservative). These number were relied on by the IDB in their due diligence in 2012. By way of illustration, at 165 MW, without factoring hydrology risks, the project can generate as much as 1,445 GWh, at full capacity. Assuming 1,050 GWH/annum, assumes a capacity utilization of 72%. It is at this capacity, that the price of 7.7 cents/kWh is calculated over a 20-year period. In some years, there may be more than 1,050 GWH generated; in others, it could be lower. Under all scenarios, Amaila delivers a significant reduction in power generation costs and a minimum annual level of energy. Amaila, in essence, is a clean renewable project. Thirdly, these matters were addressed and made a public record. For example, we attach a press release from the GOG dated October 2013 which addressed the hydrology issue. Fourthly, various studies consider the hydrology assumptions, conservative:

Independent Engineer (Tractebel Engineering S.A) for the IDB in 2013:

“Regarding the inflows, it is the Consultant’s opinion that they may have been significantly
underestimated (likely by some 23% on average) …….”

Norconsult (Norwegian independent final report dated December 2016 at the request of APNU):

“The Halcrow Group’s Hydrology Review Report of June 2011 indicates the selected factor 0.3 to be somewhat conservative (on the safe side) as regards the production potential. The same view, even stronger, especially in periods of low flow, is opined in the IE's Due Diligence Report of 2013. A conservative transposing factor (0.3) and the moderate installed capacity compared to the medium inflow to the reservoir means that the risk for not achieving the foreseen production potential is low. Therefore, the hydrological uncertainty of having scarce series of direct flow measurements cannot be concluded to be a threat to the soundness of the project.

Geological Risk:

Independent Engineer (Tractebel Engineering S.A) for the IDB in 2013:

“Globally, the geological context of the area is predominantly a compact, massive bedrock, consisting of horizontally stratified hard sandstones forming the upper plateau, and in the area of the powerhouse, power tunnel, and likely the lower part of the shaft, an intrusion of massive eruptive rock. On the upper plateau, the thickness of soils appears limited, in the area of the dam and the headrace tunnel, and the bedrock appears generally close to ground surface. In the area of the powerhouse and under the slope below the upper plateau, the bedrock appears covered by a thick deposit of soils mixed with large boulders, either of sandstone fallen from the upper plateau cliffs, or eruptive rocks boulders resulting from in place weathering process. No major fault or other kind of large geological singularity is anticipated in the area of the project works. This constitutes a globally favorable geological context.”

Norconsult (Norwegian independent final report dated December 2016 at the request of APNU) –pg. 26:

“The most favourable natural features of the Amaila Falls site for the planned hydropower project are: (i) the river gradient provides an inherent gross head of about 350 m over a river stretch of only about 3 km; (ii) the geology seems generally favourable for underground works, especially in the igneous rocks underlying the sedimentary rocks on top, and (iii) the planned installed capacity is small compared to the mean water flow in Kuribrong / Amaila rivers at the project site.” The Ministry therefore urges all media outlets to be responsible when reporting on matters of National interest.

Attached is an Oct 15, 2013 Press Release by the GOG relating to the Amaila Falls Hydrology.

GoG 2013 release on Amaila

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