Islamic bank approves US$20M loan for GPL upgrades
Minister of Finance Winston Jordan will on September 19th sign an agreement in Saudi Arabia with the Islamic Development Bank (IsDB) for a loan of US$20 million for the Guyana Power and Light (GPL), which is expected to fund a “comprehensive turnaround” of the company’s electricity distribution.
The loan is the first sum to be disbursed from the resource envelope of US$900 million that was extended to Guyana by the IsDB in 2017.
In a statement confirming the approval of the loan, the Ministry of Finance noted that Guyana has already benefitted from two grants from the Bank, totaling more than US$500,000.
The loan will be channelled into GPL’s Power Utility Upgrade Programme, which, according to the ministry, is part of GPL’s Development and Expansion for the period 2014 to 2021 and aims to reduce the overall losses in the power system.
The statement noted that GPL has long been challenged by its inability to provide a reliable supply of electricity and suffers high levels of losses, which have been compounded by a rapid increase in demand for energy by residential and commercial users.
It added that the Power Utility Upgrade Programme is co-financed by the Inter-American Development Bank (IDB) and the European Union (EU), and upon completion will reduce losses, realise a more efficient and reliable service and deliver a better quality of electricity for households and commercial users.
GPL is the Executing Agency for the project and will operate under the aegis of the Ministry of Public Infrastructure.
The ministry said the loan will facilitate the rehabilitation of 153 km of GPL’s medium voltage and low voltage network and 6,941 smart meters, including the associated transformers, service lines and distribution boxes; and the rehabilitation and extension of two 69/13.8KV substations at Kingston and Vreed-en-Hoop, including equipment switchgear, power transformers, rerouting of circuits distribution feeders and cable connections.
Sunday Stabroek previously reported that the planned upgrade proramme, which is projected to cost a total of US$110 million, will see a Jamaican electrical engineer being brought in to overlook its execution.
This newspaper was told that Jamaican electrical engineer, Colin Forsythe, will be responsible for the upgrade project’s execution and keeping the schedule in line with IsDB requirements.
GPL’s Chief Executive Officer, Albert Gordon, had said upon his appointment that eliminating power outages was his number one priority and that the utility company would be seeking to access US$110 million for the immediate upgrade of its systems.
The company has been working with government to access the needed monies as Gordon said he wanted the restructuring of the company to begin as soon as possible.
He had told this newspaper in an interview that GPL was “pursuing financing from multilateral institutions… and have had some interest from the IDB.” He also said he was optimistic, given the bank’s interest as well as the funding and technical support it has given to GPL over the years.
Once secured, the US$110 million is to be used to reroute and correct the current system, where distribution lines that take power to buildings are connected directly to the company’s generator. “That’s not how you configure a power system,” Gordon previously said, as he explained that the power should be generated and sent to high voltage lines of sub-stations for the voltage to be broken down before being distributed to the customers. “In that way, the generator is shielded from events that may happen on the distribution lines that run along the road so right now that’s not the case with a number of sub-stations.”
The Finance Ministry added that since becoming a member of the IsDB, the government has been aggressively pursuing projects that will increase Guyana’s infrastructure and optimise its productivity in the areas of agriculture, trade and competitiveness and human and rural development, having committed to the diversification of Guyana’s economy in preparation for first oil in 2020.