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– Govt. equity crucial to reduce final expenditureGuyana’s first hydroelectric project is a highly feasible one that will see consumers paying as much as 40 per cent less than what they are paying now, says President Bharrat Jagdeo.Speaking yesterday at Umana Yana,Irving Fryar Patriots Jersey UK, Kingston, where the government launched its revised Low Carbon Development Strategy (LCDS), the President also defended the government’s decision to invest money into the Amaila Falls project, saying it is the only practical way to reduce costs which in turn would positively affect prices consumers would have paid.In addition to the project’s cost which runs up to US$450M, a hefty US$165M alone is going to repay interest which would send the final price to over US$600M.It is against this background, Jagdeo argued, that government has decided to earmark between US$40 and $60M of the money coming from the LCDS fund in order to ensure that consumers will not be burdened.With equity being remitted at a rate of 20 per cent,Tom Brady Patriots Jersey UK, higher than loans, it is the only way to ensure the viability of the project.The Head of State stressed that contrary to press reports, the project will give value for money and reduce electricity cost for consumers. It means development for the country and Guyana should not be afraid of it.He explained that according to figures, the actual cost for construction of the 154MW hydro will come up to around US$306M with US$145M to be spent to bring transmission lines and build sub-stations to the city.In 20 years,Carnell Lake Steelers Jersey UK, the developers will be handing the project over to government at no extra cost and with hydro having as much as 100 years of life, it is an incredibly good opportunity for Guyana, the official stressed.Regarding cost, the President said that it will cost consumers around US10.9cents per kilowatt hour.Only two years ago, the Guyana Power and Light, because of high fuel costs, were producing electricity at around US18 cents per kilowatt hour, excluding capital costs.With this rate locked in for several years,Paul Hornung Packers Jersey UK, Guyanese has a win-win situation, the President pointed out.The President also noted that this project had gone out to public tender,Tony Gonzalez Falcons Jersey UK, with seven bids coming in from around the world.Over the weekend, project sponsor, Sithe Global, pegged the price of the project at US$650M.According to Rafael Herz, Sithe Global’s Project Manager for Amaila Falls Hydropower Project,Kevin Faulk Patriots Jersey UK, who spoke for the first time on its role in the project, the total cost of the dam, powerhouse,Dwight Freeney Falcons Jersey UK, transmission line, and substations is estimated at US$650M (including an estimated US$190M for the transmission line and other supporting infrastructure).Already,New England Patriots Jerseys UK, Sithe Global has spent in excess of US$5M on the development of the project and expects to ultimately contribute over US$150M of equity.According to the revised LCDS, the US$650M will be funded by a mixture of debt (70 per cent) and equity of 30 per cent.While the equity will be contributed by Sithe Global LLP, an 80 per cent subsidiary of the Blackstone Group of the US, and the Government of Guyana. The China Development Bank and Inter-American Development Bank will help finance the rest.In addition, the government of Guyana will be supporting the project with US$16M worth of access roads and right of the way clearing.Under the terms of the project, the government has the right “but not the obligation to substitute Sithe’s high cost equity with LCDS funds.”Additionally, Guyana can sell its equity stake in the project to private investors.The project is expected to take 40 months with launch date set for early 2014.The access roads are expected to start in July with eight months set for completion.The Project Manager stated that the electricity generated by specially designed and purpose-built turbines would be delivered to substations in Linden and Georgetown by a new 278 km transmission line.It was pointed out that since combining forces with the Blackstone group in 2005,Brian Poole Falcons Jersey UK, Sithe Global has raised nearly US$3B in capital to finance three Greenfield projects totaling 1,725 MWs, including the 250MW Bujagali hydroelectric project in Uganda, which will effectively double that country’s generation capacity.That road contract was awarded to Makeshwar Fip Motilall of Synergy Holdings.Experts on the building of such plants say the cost of hydropower construction per megawatt usually ranges between US$1M and US$1.5M.