The Amaila Falls Hydroelectric Project (AFHEP)

Synergy Holdings Inc. is involved in this project as the developer to design, build, own and operate a hydroelectric plant in Guyana.  

This project will generate electricity for the national grid (Guyana Power & Light) with future expansion capacity to power major industrial growth projects within the country. Current demands also exist in the bauxite and gold mining industries.

Guyana

Fig.1 - Location

Guyana is located on the northeastern coast of South America between latitudes of 1° and 8° (Fig. 1).  Guyana has 83,000 square miles (215,000 km²) putting it at a comparable size with Great Britain or the state of Minnesota.  If is bordered to the east by Suriname, to the south and west by Brazil and to the west by Venezuela.  If faces out to the Caribbean Sea and, as a matter of fact, it is considered to be much more of a Caricom (Caribbean Community) country than a South American country.

The capital city of Guyana is Georgetown and it is located on the Atlantic/ Caribbean coast, at a latitude of 7° north of the Equator.  The narrow coastal belt has a moderate climate (75° to 85°) with two wet seasons.  Inland there are tropical forests and savannas.  The highest point is Mt. Roraima at 9,030 feet located on the northwestern boarder with Brazil and Venezuela.

The climate is tropical with the overall annual rainfall in excess of 80 inches.  The mean annual rainfall in the project area exceeds 150 inches! [Read more on Guyana]

Project Location and Access

Fig.2 - Project Layout

The Amaila site is located on the Kuribrong River, a tributary of the Potaro River in west central Guyana (see map).  The nearest point of access is the airstrip at Kaieteur Falls on the Potaro River, approximately 15 miles to the south.  An overland trail exists from Kaieteur to Amaila.  Access is also provided over land by an all-weather road through Tumatumari on the Potaro River and on to Mahdia and Kangaruma.  River access along the Potaro-Kuribrong Rivers to the foot of Amaila Falls involves several portages around rapids and waterfalls.  The road from Tumatumari was recently extended to Mahdia/Kangaruma that brings you closer to the site but approximately 30 miles of additional roads will need to be built to the top of Amaila Falls.

Development History

The project is based on an initial study that was carried out between 1974-1976 in Guyana to explore the hydroelectric potential in the country under a grant from the United Nations. The Hydroelectric Power Survey (the Survey) was conducted by Montreal Engineering over a two-year period.  A number of sites were identified and these were further refined to three “most promising” sites.  Further studies by the developer in 1997- 2001 related to the demand for power, the economics, environmental, ecological and political impacts of developing each of these sites has led to Amaila as the location of choice.

In 1997, Synergy identified a dire need for electrical power generation in Guyana and sought to fill this need by harnessing the hydro potential of the country.  After a review of the three most promising sites identified in the Montreal Engineering study and reviewing the current demand for power in the country, the Amaila site was surveyed from the air and videotaped.  The overland road from Georgetown to Mahdia (within 30 miles of this site) was also driven to review the geology and geography of the surrounding area.

A revised design was conceptualized by Synergy Holdings Inc, in conjunction with Kleinschmidt & Associates (hydro-engineering firm) in 1997. This design was partially based on the information in the Montreal Engineering pre-feasibility study of Amaila and the data gathered from the above field trips.

This study looked specifically at reducing the environmental impact and cost of the project while incorporating the current generation equipment that exists on the grid.  In short, the KA study customized the initial, detailed engineering study done by Montreal Engineering to meet the current demand for power and to reduce the environmental impact of the project.

A reduced Amaila design with phased development (100 MW expandable to 165 MW) was decided on. This new design meets the current need for power in Guyana and offers duplicity to ensure reliability of our supply to the grid.

In 1998, Synergy Holdings Inc. joint-ventured with Harza Engineering Company (now called MW Harza Global) to fund and perform a detailed feasibility study and Environmental Impact Assessment (EIA) for the 1^st Phase of this reduced AFHEP project (Phase I).  The developers agreed to review the expandability of the project at least to Phase II. A loan form the US Trade Development Agency (US TDA) was applied for and received to cover approximately 50% of the cost of this feasibility study with the developers paying the rest.

Between 1999 and 2001, A full feasibility study and EIA was carried out on site including surveying, drilling in excess of 400 meters, and several site visits by Harza engineers to evaluate the drill cores and the physical characteristics of the site and to install river gauging equipment downstream of the falls. A man-camp on site and an access road crew in excess of 50 personnel worked on this project for several months. Drilling equipment were flown in by helicopter, supplies came in by river and the ATV access road.

Following the on-site investigations and mapping several alternate designs were looked at and the developers chose a final design that offered the lowest construction cost while maintaining the expandability of the project.

Project Design & Description

The Amaila storage dam site would be located near the top of Amaila Falls and would impound the waters of both the Kuribrong and Amaila Rivers.  The area upstream of the falls is flat, forested and with bedrock near the surface.  There are no inhabitants to be relocated or other known environmental concerns. 

The river drops from the escarpment over Amaila Falls vertically approximately 200 feet, and continues in a series of rapids and falls for almost two miles before reaching placid water at an elevation of 175 feet.  The total drop is about 1,200 feet.  During the course of the falls the river changes direction from east to north, thus helping to shorten the water conduit system for the power development.

In the lower elevations the walls of the escarpment are flatter but these steepen sharply with elevation until the valley walls are nearly vertical at the top.  The Amaila Falls is not a spectacularly scenic vista (as compared with Kaieteur Falls), and as such it is not considered a potential tourist attraction.

The flooded area of the reservoir would be approximately 8.8 square miles at full supply level of 1,400 feet and is heavily forested.  The reservoir would be cleared for one-half mile upstream of the dam.  The reservoir would provide a change from the prevailing green of the jungle and with the access roads etc. it would provide a body of water useable for recreation (e.g. fishing, boating) and transportation.

There is no technical or environmental reason why Amaila Falls Hydroelectric Project (AFHEP) should not be built.  The huge, long term savings in foreign exchange and the reduction of carbon emissions from the current diesel generators are powerful additional economic and environmental reasons why this project needs to be constructed.

Interim Development Period

Following the feasibility study works described above, the Project attracted equity investors and multi-lateral Banks to finance the construction of Phase I of AFHEP. A Power Purchase Agreement (PPA) could not be finalized with the then privatized utility in Guyana- GPL. During this period (2002- 2004) additional work on the transmission line, reliability studies and work on the financial models continued. The hydro-power license was extended by the Government to allow development work on the financial package to continue.

Present Situation

With the rising price of oil, AFHEP became a necessity for Guyana to have since the country was spending approximately 25% of its Gross Domestic Product (GDP) to purchase fuel and most of this was going to fossil fuelled electrical generation equipment. In mid-2005, serious talks were restarted between Synergy, GPL (which had reverted back to government ownership) and the government of Guyana in an attempt to finally put this project on a fast track development schedule. By this time additional generation was required by GPL to meet increased demand for power and the number of self-generators in the country was increasing.

As the development phase of the project had moved away form its technical emphasis and the focus was more on the financial engineering and commercial aspects of the deal, Synergy joint ventured with MaxPower International and Cj Independent to put together the financial package that will work for the Project. MaxPower and Cj Independent has successfully developed and financed a number of power projects in many countries of the world and they were familiar with the requirements of the world financial markets to make this project bankable.

Following a series of meetings with Government, an MOU was signed between the developers and Government on 23^rd May 2006 outlining their agreement to proceed with the development of AFHEP. The schedule that was agreed upon has the start of construction of AFHEP in August 2007 with commercial operation on the last quarter 2010. In the interim, Synergy and its partners agreed to supply a thermal power plant of 25 MW (to be operational in March 2007) as a way to meet GPL’s demand for power until the hydro-power plant can be built. The hydro project will assimilate the thermal plant upon its commissioning and the 25 MW thermal power plant will most likely operate in a back-up capacity after 2010.

PRESS RELEASES

Hydro-power scheme draws closer
By Mark Ramotar

24^th July 2006 Presidential Press Conference- Tower Hotel, Guyana

THE Government of Guyana, Guyana Power and Light Inc. (GPL) and U.S.-based Synergy Holdings Inc., are moving closer to realising a “national aspiration” which entails development of a multi-billion-dollar, 100 MW hydro-power station at Amaila Falls.

This development of the Amaila Falls Hydropower Project, located in the West Central interior of Guyana, is estimated to cost more than US$300M.

The current status of the project, which has been on the cards for several years and which faced several stumbling blocks, and the vision of hydro-power for the future were outlined by President Bharrat Jagdeo, Prime Minister Samuel Hinds and President of Synergy Holdings Inc. Mr. Fip Motilall at a forum yesterday afternoon at the Hotel Tower in Georgetown

It was noted that financial closing and ground breaking are targeted for August 1, 2007 while commercial operation is scheduled to begin by December 15, 2010.

The project entails the installation of transmission lines from Amaila Falls to the Sophia sub-station in Georgetown and Prime Minister Hinds said the price for electrical energy delivered at Sophia is capped at 7.5 US cents per kWh (kilo-watt hour).

President Jagdeo and Prime Minister Hinds both made it clear that the Memorandum of Understanding signed by the Government, GPL and Synergy in May this year can be terminated by the Government and GPL before August 1 next year if the estimated delivered price comes in greater than the target of 7.5 US cents/kWh.

Over the last dozen years, potential developers have been pursuing interests in five different potential hydro-power sites in Guyana.

Mr. Hinds noted that Synergy Inc. headed by Motilall – a Guyanese-born living in the U.S., began working with a number of North American partners as early as 1996, to pursue a hydropower development at Amaila Falls to supply the local electricity grid.

Synergy is committed to accepting the lowest cost financing for the project and Motilall said the bid documents are almost completed and will be going out to tender shortly.

He also indicated that when the need develops, the Amaila Falls Hydropower plant can be upgraded to about 165 MW in a second stage development.

President Jagdeo, in his remarks at yesterday’s forum, noted that the development of Guyana’s hydro-power potential has been a “long national aspiration”. He said past attempts to develop the country’s vast hydro-power resources have been met with various challenges.

“At present the Amaila Falls hydro-power project is the most advanced hydro-power project... this project will also provide affordable reliable energy that will act as a springboard for investment and development in many areas,” the President told those gathered at the forum.

He was also optimistic that the availability of reliable and affordable electrical energy will “provide the impetus for exponential growth in this great country”.

The potential for hydro-power in Guyana is estimated to be in the region of 7,000 MW, representing a major opportunity for Guyana, both as a primary source of power for domestic consumption and as a place for the development of large scale industries which require significant electricity capacities such as aluminum smelters and the production of hydrogen based fuels.

Mr. Jagdeo noted that hydro-power – renewable energy produced from water – has great potential in Guyana with more than 67 possible hydro sites in the country.

“Hydro-power development in Guyana has always been hindered by the high initial cost associated with the construction of the power stations and the transmission facilities,” the Guyanese Head of State said, adding that the government is mindful of the many benefits that flow with hydro-power.

He noted that Guyana, like many other nations, continue to battle the global problem of increasing oil prices, the effects of which affect every stratum of society and threatens progress and economic development.

The price for diesel has skyrocketed from US$35 per barrel in 2003 to US$91 per barrel in 2006, President Jagdeo said. Noting that at present, petroleum products form the primary source of energy in Guyana, he recalled that in 1994, petroleum imports accounted for some 16% of Guyana’s Gross Domestic Product (GDP) and this figure escalated to 25% of GDP in 2004.

He said projections suggest that this trend will continue as the price for fuel on the world market continues to rise, coupled with the fact that petroleum resources are being depleted. President Jagdeo said this phenomenon presents a significant challenge for Guyana.

“Guyana’s dependence for imported petroleum means that the country is vulnerable to international oil prices and diversification of energy sources is required to reduce this vulnerability,” the President contended.

According to him, the Government is already actively encouraging major alternative energy projects in Guyana.

In this regard, he alluded to the Skeldon sugar estate co-generation plan, which when it comes on stream, is expected to add at least 10 MW of power to the national grid by 2008. Discussions are also ongoing between GPL and the developers of the Hope Beach Wind Farm which is expected to produce an additional 4 MW of power before the end of 2007, President Jagdeo said.