US$ 506M contract for hydro project signed in China

–Guyanese set to benefit from cheaper electricity

The Engineering Procurement and Construction (EPC) agreement for the construction of the Amaila Falls Hydro Project and transmission line was on Tuesday signed in Xian, China by Sithe Global and China Railway First Group. The contract was finalised by Sithe Global CEO Bruce Wrobel and China Railway First Group Chairman Dr Sun Yonggang.

Speaking at the signing ceremony, Finance Minister Dr Ashni Singh described the occasion as a historic moment for Guyana and for Guyana-China relations, alluding to the strong relationship the two countries enjoy and the increasing role that Chinese enterprises play in the development of Guyana.
Minister Singh stated that the Amaila Falls project presents an opportunity for these relations to enter a new phase as the project represents the single largest investment in Guyana and one of the largest Chinese investments in the Caribbean.
The execution of the agreement was witnessed by Minister Singh, Guyana Power and Light Inc CEO Winston Brassington, and Office of the President advisor Steven Grin, along with representatives of the Shaanxi Province, the China Development Bank (CDB), the China Export and Credit Insurance Corporation, the Inter-America Development Bank, and Sithe Global and China Rail.
Singh commented that: “This transformational project is the single largest investment in Guyana and will allow Guyana in one single step to move from being almost entirely dependent on costly fossil fuels to being supplied almost entirely by renewable energy. We are delighted to have such credible partners recognise the importance of the project and be ready to invest private capital in Guyana.”
The minister said he was delighted “to represent Guyana at this historic milestone and I urge all partners to recommit their efforts to seeing the timely realisation of financial close and implementation of this project, all the way to its coming into operation”.
Wrobel said: “We are pleased to be associated with this project, long in the making, that will make a huge difference to the people of Guyana and is representative of the globalised world that we inhabit – a project with many important players….”
The EPC contract, at a value of US$ 506 million, is the largest infrastructure contract ever executed in Guyana. The signing signals an important milestone in the development of the US$ 840 million Amaila Falls Hydro Project. The start of this project is expected by mid-2013.
China Railway First Group was founded in 1950 and is a state-owned entity, with over US$ 9 billion in annual revenue. It is part of China Railway Engineering Group, a company with over US$ 90 billion in revenue. It is the third largest construction company in China and one of the top 100 construction companies in the World.
China Railway First Group is headquartered in Xian, China. Sithe Global is a fully- owned subsidiary of the Blackstone Group. Blackstone is one of the largest private equity funds in the world, with more than US$ 120 billion under management.
CDB is one of the largest commercial banks in China with assets in excess of US$ 900 billion. The project is being led by the Shaanxi branch of the CDB, in Xian. The IDB is one of Guyana’s oldest development partners in the energy sector with more than US$ 171 billion in capital.
The Amaila Falls Hydropower Project is the flagship of Guyana’s Low Carbon Development Strategy. The plant will deliver clean, renewable energy that is affordable and reliable. It will meet Guyana’s domestic energy needs and eliminate its dependency on fossil fuels. The project involves the construction of a hydropower plant in west- central Guyana, where the Amaila and Kuribrong rivers meet.
Electricity produced at the plant will be delivered to Georgetown, and the largest town, Linden, by a 270km high-voltage electric transmission line.
There are three parts to the project: the hydropower plant, which involves the construction of a dam where the Amaila and Kuribrong rivers meet to create a reservoir upstream of the dam. The project is expected to have the capacity to produce 165 megawatts of electricity by releasing impounded water through turbines specifically designed and built for the plan.
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 270km-long transmission line will be supported on towers approximately 36 metres tall and 300 metres apart, carrying two circuits thus providing redundancy in the event of the loss of one circuit.
Additionally, an access road is being built in order to access the project site. The 65km road will connect the project site to the existing Bartica-Potaro Road. Another new road, approximately 20 km long, will be constructed from the existing Mabura Hills Highway to the Essequibo River. Other existing roads will be upgraded in order to provide access to move equipment, supplies, and personnel.
Construction of access roads began in 2010 and will be completed in advance of the construction of the hydropower facility. Government said the project is pivotal to Guyana’s sustainable development vision – protecting environmental biodiversity and minimising adverse impacts to local communities are important factors in project implantation.
Once completed, the project is expected to remove 92 per cent of Guyana’s energy- related greenhouse gas emissions, deliver energy security for Guyana, provide cheaper energy for citizens and businesses, and promote the achievement of the Millennium Development Goals in Guyana.