Guyana Loses Major Investment

News Americas, GEORGETOWN, Guyana, Fri. August 16, 2013: The South American nation of Guyana has lost a multi-million dollar investor to political wrangling.

Failure by the country’s parliament to support the Amaila Falls hydroelectric generation project has resulted in a pull out by U.S.-based power developer Sithe Global, which is owned largely by investment giant Blackstone Group.

“The project 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,” Sithe Global said in an ad published in Guyanese newspapers on Sunday.

Sithe also said the Guyanese parliament had not fully supported legislation needed for the Inter-American Development Bank to provide financing for the 165-megawatt dam.

A planned $100 million IADB financing deal required unanimous parliamentary backing for legislation creating environmental protections for the area around the site and raising government loan guarantees to state-owned companies. The construction of the new 165MW hydroelectric facility was set to create an opportunity for Guyana to generate its own power from a clean, natural source and with it a dependable, affordable source of electricity fostering growth and economic development in the country. The plant, was to be located where the Amaila and Kuribrong rivers meets and was expected to deliver electricity to Guyana’s capital, Georgetown, and its second largest town, Linden, by an electric transmission line. Construction of the hydro facility and electrical interconnection was anticipated to begin in late 2013 and take approximately four years to complete.

The country’s main opposition party, A Partnership for National Unity, opposed the measures on complaints of mounting costs and lack of transparency in the project’s construction.

Guyana President Donald Ramotar in commenting on the withdrawal said the decision could also jeopardize a $250 million environment protection deal signed with Norway, from which the government had set aside $80 million toward financing the hydro project.