November 27, 2014

U.S. backs Amaila hydro project

U.S. Ambassador D Brent Hardt

U.S. Ambassador D Brent Hardt

– urges all parties to work in country’s interest

In its strongest statement yet on the Amaila Falls project, the United States government on Monday urged all political parties to come together in the national interest to support the investment “that will improve the lives of its people with less expensive and more reliable energy”.

In an op-ed column, U.S. Ambassador to Guyana D Brent Hardt said the demise of this project is likely to diminish Guyana’s future attractiveness to international investors, and make future investments in the energy sector riskier and more costly.

He prefaced his column by referencing the recently concluded investment conference organised by the Canadian high commissioner with the support of the U.S., EU, and UK diplomatic missions and an array of local private sector organisations and enterprises.

An artist’s impression of the Amaila Falls hydropower plant

An artist’s impression of the Amaila Falls hydropower plant

He said at the conference, participants were able to examine both the investment opportunities available in Guyana and some of the obstacles investors face in pursuing opportunities here.

Political stability

“One of the most critical elements for investors is political stability and reliability over the term of an investment.  They need to know that a project, once launched, will enjoy continuing support regardless of potential political shifts.  Such political stability and reliability requires political leadership that is willing to pursue policies that will advance long-term national interests, create new opportunities for people, and improve the standard of living for all,” Hardt said.

According to him, over the past month, the apparent demise of the Amaila project had vividly demonstrated just how these issues can directly affect economic development and progress.

“Until recently the project, which has been under development for six years under Sithe Global, appeared to enjoy the implicit support of all political parties.  In recent weeks, however, the project suddenly became enmeshed in political battles that had little to do with the potential of the project to generate cheaper, more reliable, and more environmentally-friendly energy for decades to come.”

Hardt said that to mitigate potential political concerns for a project that represented 25 per cent of Guyana’s GDP – the biggest single investment in Guyana’s history – the investors determined that they would require a unified commitment from all of Guyana’s political parties.  Such a commitment was necessary to ensure that the investment required would not become subject to a loss of support in the event of shifting political configurations, the U.S. ambassador asserted.

Sad situation

“Sadly, the country’s political parties have thus far been unable to come together to support a project that offers all citizens – of all parties – the prospect of lower electricity rates and more reliable energy.  The demise of this project is likely to diminish Guyana’s future attractiveness to international investors, and make future investments in the energy sector riskier and more costly.”

Hardt said while the window to prevent such an occurrence is small and closing fast, “we call on all political parties to come together in the national interest to support a project that all parties have long agreed is necessary to boost Guyana’s competitiveness and improve the lives of its people with less expensive and more reliable energy.”

Since Sithe Global pulled out of the project last week, government had been trying all out to get the initiative back on stream. Sithe Global, a New York-based company had cited the lack of political consensus for it not going forward with the project. The project secured the votes of the government and the Alliance For Change (AFC), but the main opposition, the A Partnership for National Unity (APNU) voted against it, citing a lack of transparency by the government and the need for more information. It is also sceptical as to whether the project will succeed.

In its statement, Sithe Global had said that because the project was not supported by all three political parties, it cannot move forward, despite 16 years of work and over US$16 million of independent Sithe Global expenditures and more than US$15 million of government expenditures.

“We had hoped that the project’s 40-91 per cent reduction to power prices for consumers, its significant environmental benefits and material positive to impact on the economy via access to low-cost reliable power would have been sufficient for all political parties to support such a non-partisan project that would have served as a catalyst for growth for generations to come,” Sithe Global had said.

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