Guyana government mourns collapse of hydro deal

Bert Wilkinson | 8/15/2013, 10:24 a.m. | Updated on 8/15/2013, 10:24 a.m.
Flag of Guyana

Despite the fact that it lost thousands of supporters at the November 2011 general elections and control of Parliament to the opposition, the government of President Donald Ramotar had continued operating in its usual political fashion, never compromising an inch, abusing opposing legislators and ignoring assembly decisions if it did not like them.

But in the past week, it has been at the receiving end of a cruel political lesson relating to a key hydro project deal involving Chinese, American and other international investors that it was putting together in order to generate clean electricity and end 40 years of intermittent rolling blackouts. U.S.-based Sithe Global LLC, one of the main partners of the Amaila Falls Hydropower Project in central Guyana, announced that it was so dissatisfied and uncomfortable with political opposition to the scheme that it had chosen to walk away from the Caribbean trade bloc nation rather than risk the political uncertainty and its investment in the mega project.

Ramotar, whose Indo-led party prides itself on doing exactly what it pleases despite pleas from the opposition, media and civil society, is now walking cap in hand, begging political rivals to support it, as the project will likely fall flat on its face and eventually be a negative for the national investment climate.

He told the nation in a television address that Sithe Global “wanted full parliamentary support for this project because of the magnitude,” but decided to abandon it because of the opposition’s “short-sighted position and a clear reluctance or inability to rise above narrow political agendas.”

The 170-megawatt-plus project was being promoted as a key element of the country’s effort to become a low carbon emission economy and one that was planning to move away from fossil fuel power generation as much as it practically could. Since 2009, it has established a partnership with Norway to earn $250 million over five years to ensure that its stock of Amazonian rainforest remains intact. It has already collected more than $100 million of this so far.

Speaking on its own, Sithe Global said in a newspaper advertisement announcement that “not all parties were willing to set aside politics for the broader public good, and as a result, today we reluctantly announce our withdrawal from the project. However, it was not supported unanimously by all three political parties, a necessary prerequisite to the project receiving international development funds required to complete it. Thus, the project cannot move forward despite 16 years of work and over $16 million dollars of Sithe Global’s independent expenditures and more than $15 million of government expenditures.”