The government is moving to swiftly implement its US$34.4M Unserved Areas Electrification Programme (UAEP) which will divert US$8.1M to the power company to cut system losses by ten percentage points over the next five years.
The Inter-American Development Bank (IDB) recently gave the nod for the renegotiated UAEP for which a US$27.4M loan had been approved by the bank in June 2002. However, after the CDC/ESBI investor group walked away from the power company last April, the government had to develop a strategy to sustain and develop the power company to allow it to renegotiate the loan with the IDB.
The original project had envisaged Guyana Power and Light Inc (GPL) addressing the issues of system losses, investments in the transmission line between Garden of Eden and Sophia as well as the distribution system between Garden of Eden and Versailles to allow the UAEP to connect 40,000 new customers to the grid.
However, these investments were not made and GPL asked the IDB to divert some of the money from the investment component of the UAEP to aid in system-loss reduction which now stands at about 40%.
The reworked project, for which a memorandum of understanding has been signed, will allow for US$8.1M to be spent on loss reduction but not on transmission-line or substation investments.
The total investment component would be US$26M.
The new design has a financial cap on new connections and the sum allocated is expected to target 30,000 households instead of the original 40,000 but Maxine Nestor, Project Coordinator, is hoping to include as many households as she of.
The project will fund new connections as well as design and implement four or more demonstration projects in hinterland areas, using the most cost effective source of energy and allowing for system-loss reduction in GPL, Nestor says.
In the case of the latter, a detailed study is to be conducted to determine the most cost effective way to curb system losses and how this should be accomplished. Nestor says modern technology would be explored in this process.
The project is expected to finance replacement of defective meters among other measures.
There is also an institutional strengthening component for the project, which will see the electrical inspector department strengthened and new technical regulations in place. Additionally, support would be provided to help GPL negotiate power purchase agreements. GPL intends to secure 60 megawatts of new generation capacity through power purchase agreements including from Guysuco, Delta Caribbean and others. The Project Implementation Unit (PIU) has already begun procuring material to get the project, which is now to be implemented in two phases, off the ground. Mid-term benchmarks would have to be met for the project to be successfully completed.
Prior to the release of the funds, the PEU has to be staffed for loss-reduction investments and a loss-reduction assessment and prioritising of all non-transmission investments have to be done. Based on the assessment, an investment programme for system losses will have to be agreed to between the government and the IDB.
A condition of the second phase is Cabinet's approval of the hinterland electrification strategy, which has to be made public, and completion of preparatory work on one demonstration project for the hinterland.
A tariff rebalancing plan with specific indicators is to be agreed to by November 1 for implementation by the start of the January 2005. GPL has to present concrete plans for addressing generation and transmission requirements in its development and expansion programme and the latter should be made public along with its annual report and procurement contract above US$100,000.
A re-privatisation policy and strategy for the power company is also required to be approved by Cabinet and made public.
The government and GPL are also required to submit to the IDB, a proposal which contains indicative annual performance indicators of financial performance, efficiency, quality of service and overall losses for GPL. Achievement of indicators related to grid extension and loss reduction will be required for phase II investments.
In the first phase, commencement of which is slated for January 2005, 12,000 households will be connected in the grid at an estimated cost of US$550 per connection. The budget for new connections is US$6.6M. And for loss reduction, US$198,000 will be spent on the study while US$2.5M will be spent on investment/management services. The first phase will cost US$14.6M as against US$19.7M in phase two.
While GPL will be executing the investment component, the overall responsibility falls under the Project Implementation Unit.
In the first phase, the villages listed below will receive electricity.
Regions
2005
2006
Two
Henrietta/Richmond, Pomonom Suddie Sand Pit, Suddie New, La Belle Alliance, Charity, West Bury, Bush Lot, Lima Dairy and the Jibb
Adventure Sands, Airy Hall Sands
Three
Tuschen North (Block 9-J&H), Patentia, Clay Brick Road, Prem Nagar, Zeelugt North, Crane, Cornelia Ida, Anna Catherina South, Zeelught South, Vergenoegen South
Viva La Force, Vriesland, Goed Intent, Goed Fortuin, Edinburgh, Tuschen -Parika Railway Embankment
Four
- Sophia Block F, E, AA, Pattensen Sec B, Turkeyen Sec C & D, Foulis, Mosquito Hall, Area G Strathspey, Foulis Block II, Liliendaal Block X, Cummings Lodge Area Y and Paradise Area G;
Goedverwagting South, Sparendam South, Paradise Coop B9(between streets 1-10), Golden Grove/Caneville, Herstelling B1, B2, Golf Course (lusignan), Caledonia Sophia Town - Friendship, Land of Canaan - Gafoor Plot, Lancaster Square Area.
Five
Experiment B1C, Waterloo 1F and Block 2,Zorg-en-Hoop Area H&N, Bath
Plantation Farm, Essau & Jacob, Moco- Moco, Governor Light, Bara Bara, Yarrow Creek
Belvedere/Hampshire Block X of B 7, Little India, Little Africa, Rotterdam, Lansdale, Brothers, Sistes, N0.1 South, N0.78 Village, Chesney-Kilkoy, Canefiled East, Bangladesh