By Gitanjali Singh
Stabroek News
May 10, 2001

The government and the power company yesterday announced a US$25 million ($5 billion) subsidy programme to allow an estimated 55,000 households to be supplied with electricity over the next five years.

The first 1,700 of those families who should have power before the end of this year - once they fulfil their obligations - are from ten areas in Berbice: Number 35 and Number 36 villages on the Corentyne; Bushlot Farm; Whim; Chesney-Kilkoy south; Topoo; Fyrish/Number One Village; Belvedere Squatting Area and parts of Canefield east as well as Sandvoort, West Canje.

These 1,700 families fall within 213 areas in Guyana, which have been identified as unserved by electricity and are all expected to benefit from the subsidy project. To qualify, households have to prove their right to occupy the house; pay a contribution of $10,000, wire their houses according to approved standards; pay the standard security deposit that all customers pay of two months of projected billing, and sign a contract with Guyana Power and Light Inc (GPL).

The project, which kicks off on June 1, is being funded by the government and GPL, with 80 per cent or $4 billion coming from government coffers and the other 20 per cent ($1 billion) from GPL. Customers' contribution is expected to provide a further $0.5 billion if 55,000 customers are added to the network.

Prime Minister Sam Hinds yesterday told reporters at a press conference at GTV 11 that the government was negotiating with the Inter-American Development Bank (IDB) for a US$25 million soft loan to complete the project as well as to finance a number of hinterland energy demonstration projects.

The soft loan will also fund a study on possible energy sources for various communities in the hinterland and will seek to establish a number of pilot projects to provide data for a phased electrification programme for hinterland communities.

Hinds said he expected that the IDB loan would be approved before the end of this year, but if it was not, the government would provide the bridging finance for the project until its secured the bank's approval. The government, in November last year, released $200 million for the electrification programme for the unserved areas. $500 million is expected to be spent on the electrification of unserved areas this year.

The government, in its agreement with GPL, had agreed that over the first five years, GPL must contribute annually up to 25% of the cost of new connections in rural areas. This contribution has a cap of US$1 million per year. The remaining portion of the investment was to be met by the government and funds from new customers. To date GPL has brought in US$15 million of its equity in GPL with US$5 million to be brought in this year and the final instalment of US$3.5 million to be injected next year. The majority shareholding in GPL is held by the Commonwealth Development Corporation of the UK and ESBI of Ireland.

Hinds - who has responsibility for the power sector - said yesterday that the extension of the electricity grid was costly, averaging $1 million to $2.5 million per mile. He said the cost for unserved areas seeking connection to the grid could cost the household between $40,000 to more than $200,000 depending on the distance from the grid, the number of households and the distances between the houses in the areas.

He said that to date, 213 areas which accounted for over 40,000 households, had been identified for assistance under the programme which will extend through Regions Two, Three, Four, Five, Six, and Ten, where extension of the existing GPL network was feasible.

Sharing a media briefing with John Lynne, new chief executive officer of GPL, Hinds said the criteria for selection and sequencing of the 213 areas for assistance were: evidence of a need for assistance; where the average cost of connecting the area did not exceed $200,000 per household; the length of time the area has been in existence; availability/completion of plans for the area to allow the design of the distribution system; areas with lower unit costs and larger number of households; potential customers' readiness and willingness to pay; the need for an orderly, rational expansion of the distribution system.

Lynne indicated that new low-income housing schemes developed under the housing programme, squatting areas, which have been regularised and existing areas unserved when the electrification programme stalled in 1970 were typical locations to be served. Both the government and GPL will decide on the districts, which will benefit, with the Ministry of Housing and Water playing a key role.

However, Lynne indicated that priority will be given to the areas with the most customers and pole planting will only start when 50 per cent of the persons had paid their instalments. This would not be the case in the first ten areas as work will start before 50 per cent of households pay their contribution. However, customers would only be connected when the conditions of service were met.

Lynne said the Unserved Areas Electrification Project provided an opportunity for all targeted households to be connected within the next five years. Temporary facilities would be set up in the areas to receive applications and to advise customers of the requirements. He cautioned against persons paying money over to anyone other than authorised officials of the company who will be properly identified.

Lynne said that the programme would be managed as a series of projects progressing from one area to another and Hinds indicated that it would call for more contractors than normally used by GPL. The project will be subjected to oversight by the IDB and the government via a project coordinating committee.

Middle and upper income housing developments, which could afford to pay the full cost of connection, would have to continue to make their own arrangements directly with GPL.



Power firm earmarks US$50M for increased generation



The power company is investing US$50 million in additional generation with ten megawatts to be installed at the Garden of Eden next year followed by 20 megawatts in the next two years.

Chief Executive Officer, John Lynne, said the Guyana Power and Light Inc (GPL) is currently engaging someone to have the first ten megawatts of new capacity installed and this will assist in the conversion from 50 cycles to 60 cycles.

Lynne indicated that much of the new capacity could be brought forward if the need was there, given the Unserved Areas Electrification Programme, which the company was embarking on with the government.

GPL plans to embark on a US$100 million upgrade of both generation and transmission over the next five years and is currently negotiating with the European Investment Bank for financing.

However, the company is not unaware of the potential of power from hydroelectric projects, including one at Amaila Falls, which is aiming initially to produce 100 megawatts of power.

Prime Minister Sam Hinds yesterday indicated that the government was considering this issue and what it would mean for future electricity supply in Guyana.

Lynne indicated that GPL was engaged in talks with the principals of the Amaila Falls project. The talks are in the early stages, but he stressed that risks had to be worked out before any arrangement could be entered into. He noted that the Amaila Falls project was some 250 kilometres away and there were potential pitfalls in getting power from such a distance should there be low water supply. However, Lynne said the discussions were ongoing.

In the meanwhile, GPL is looking to strengthen its generation capacity.

Additionally, the power company will be linking Sophia to the Onverwagt Power Station via a 69 KV line, which is expected to bring stability to power supply in the Berbice Interconnected system. This project will be done next year. The 69 KV line between Number 53 Village, Canefield and Onverwagt is also being worked on.

Lynne assured that currently there was enough spare capacity in the Berbice system to allow for its efficient functioning.