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US$80 million Norway funds still in limbo

but US$37M released for other projects

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By Neil Marks

Funding from Guyana’s 2009 forest-saving deal with Norway continues to trickle in, but the government is struggling to justify the release of US$80 million which was originally intended for hydropower development.

Just this morning Norway agreed to release US$14 million for a Sustainable Land Development and Management Project, Minister of State Joseph Harmon told the News Room. In addition, he said Norway is also putting US$17 million into ICT projects. There is also funding under a current tranche of funding for the Amerindian Fund and Amerindian Land Titling, he said during the lunch break of the 2018 National Budget at Public Buildings.

However, Norway has not committed to the release of US$80 million which the previous PPP/C government had intended to use for the Amaila Falls Hydro project.

When it came into office in May 2015, the current APNU+AFC Coalition decided to reassess the feasibility of proceeding with the project and after a study by Norconsult AS of Norway, it decided to shelve building the dam at Amaila.

“It is the view of the Government that the Norconsult Report has given credence to its position on the need for an energy mix to increase the country’s share of renewable energy by close to 100 percent by the year 2025.

“The report also provides supporting evidence that the Amaila Falls Hydropower Project would not be optimal in its current model and presents an unbalanced risk to the Government and People of Guyana,” the Ministry of the Presidency stated towards the end of 2016 in announcing the decision to abandon the project.

The 165 MW Amaila Falls Hydropower Project was trumped up as the flagship of the Low Carbon Development Strategy (LCDS) and was intended to deliver a steady source of clean, renewable energy that is affordable and reliable. It was estimated that the project would meet 90% of Guyana’s domestic energy needs while removing the dependency on fossil fuels.

Before the project was abandoned, an estimated US$40 million was spent on a road to access the site in west-central Guyana, approximately 250km southwest of Georgetown.

In an effort not to lose the US$80 million, the government has been negotiating with Norway. Speaking during the 2018 Budget Debate today, Harmon revealed that Norway had requested copies of the Green State Development Strategy and Guyana’s Energy Roadmap. Both were provided.

Guyana has given a commitment to move completely to renewable energy by 2025, but Harmon noted that Norway had an issue with natural gas being under the classification of renewable energy.

Harmon said the government has requested a meeting at the ministerial level to thrash out the issue.

He indicated that the government was intent on pursuing natural gas.

“With consistent and persistent pushing from the ministry, we have been able to so far- and I believe it’s going to improve- we have been able to identify that we can get between 30 to 50 million cubic metres per day,” Minister of Natural Resources Raphael Trotman told the Parliamentary Natural Resources Committee last April.

The State-owned Guyana Power and Light Company has advertised for expressions of interest to build and design a 50MW Capacity Dual Fuel (HFO and Natural Gas) fired power plant under a 25-year Build, Own, Operate arrangement.

“It is not a renewable resource, but it is a national resource and it’s available,” Harmon declared.

But he quickly added that the recourse to natural gas was a “temporary” step, a “transitional step” as Guyana moves to complete reliance on renewable energy.

The government’s contention is that natural gas is cheap and clean gas, with emissions being at least 50-60 percent less than fossil fuel.

“We need to move this country forward; we need to ensure that we can provide a certain quality of electricity to move the industries in this country,” Harmon stated.

Historically, Guyana has depended on imported petroleum-based fuels as its primary source of energy. Between 2012 and 2016, Guyana imported roughly $300-600 million per year in fossil fuels (mostly refined fuels), accounting for 15-33% of imports.

The government has committed to reducing dependence on fossil fuels for energy generation, achieving close to 100% renewables by 2025 through a diversified renewable energy infrastructure including biomass, solar, wind and hydropower.

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