China Eximbank provides a RMB 270 million government concessional loan for the Guyana Power and Light Transmission Project

In late September 2008, the Export-Import Bank of China and the Government of Guyana signed a memorandum of understanding (MoU) for the provision of a concessional loan to finance the development and expansion of the Guyana Power and Light Transmission Line. Then, on May 10, 2010, in the presence of Prime Minister of Guyana Sam Hinds, the Export-Import Bank of China and the Government of Guyana signed a RMB 270 million ($39.6 million) governmental concessional loan (GCL) agreement [CHINA EXIMBANK GCL No. (2009) 46 Total No. (297) No. 1290003052009110756] for the Guyana Power and Light Infrastructure Development Project. The GCL was repayable in 31 equal semi-annual installments. Its repayment period began on September 21, 2015 and its final maturity date was June 29, 2030. As such, the GCL (loan) carried the following borrowing terms: a maturity of 20 years, a 5 year grace period, a 2% interest rate, a 0% default (penalty) interest rate, a 0.75% management fee, and a 0.5% commitment fee. The Government of Guyana on-lent the proceeds of the loan to Guyana Power & Light, Inc. (GPL), a Guyanese state-owned utility company. The on-lending agreement specified the following borrowing terms: a 4% interest rate, 17 year maturity, and 5 year grace period. GPL used the loan proceeds to finance a $33,881,618.78 commercial contract (GPL-PD12-05/2009) with China National Machinery Import & Export Corporation (CMC), which was signed on October 28, 2009 and amended in November 2011 (to accommodate project scope changes). As of December 31, 2020, the borrower (GPL) had repaid $10.3 million and the loan’s total amount outstanding (including principal and capitalized interest) was $30.9 million (RMB 159,953,000). The purpose of the project was the development and expansion of GPL’s transmission and distribution system via the construction of seven 69/13.8 kV substations [New Georgetown (North Ruimveldt), Diamond (Golden Grove), Good Hope, Columbia (Mahaica), Versailles, Vreed-en-Hoop, and Edinburgh], 110 km of 69 kV overhead transmission lines, the renovation and expansion of the Kingston, Sophia, and Onverwagt substations and the construction of a fiber-optic network that would link all substations (as far east as Skeldon, as far west as Edinburgh, and as far south as the Garden of Eden) to a Supervisory Control and Data Acquisition (SCADA) system at a new 69 kV substation and control center in Sophia. The project also included the laying of a 69 kV submarine cable across the Demerara River from Kingston to Vreed-en-Hoop. It was envisaged that the transmission lines and substations would allow power to be moved in bulk from the oil-fired power plants in Demerara and Berbice to the coastal electrical load centers. Furthermore, the project included the installation of 26 new 13.8 kV primary distribution feeder outlets at the substations to allow the long, overloaded feeders, mostly along the Demerara River, to be divided into shorter, more lightly loaded segments. The project was expected to improve the quality of power supply, the system's stability, improve voltage regulation, and reduce the amount of energy lost to transmission loss in Guyana. The project also sought to prepare the system to distribute power from the Amaila Falls Hydro Project (which was slated to receive financing from China Development Bank but was suspended in 2015, as captured via Project ID#56136). The project was expected to address Guyana's inadequate power supply, uneven distribution, and expensive prices. In addition to contractor CMC, GPL was also active in the project's implementation, having the responsible to dredge the Demerara River to allow for the installation of a 1.8 km, 69 kV submarine cable. In November 2011, the commercial contract was amended to captured the following project scope revisions: (1) construction of approximately 93.5 km of 69 kV Transmission Lines, linking all sub-stations in Demerara and Berbice (Kingston to Vreed-en-Hoop, Vreed-en-Hoop to Edinburgh, Extended Sophia to New Georgetown Substation, and Sophia to Onverwagt); (2) construction of seven new 69/13.8 kV substations (New Georgetown, New Sophia, Golden Grove, EBD, Good Hope, ECD, Mahaicony, ECD, Vreed-en-Hoop WBD, Edinburgh, WCD), including seventeen new 13.8 kV feeder outlets/switchgear; (3) expansion/upgrading of existing substations (Sophia substation, Kingston substation, Onverwagt, WCB substation; and (4) installation of SCADA System. The cost of the amended commercial contract increased to $38,963,861.60. then, the project experienced another scope change that raised the total cost to $41.4 million, with GPL assuming responsibility for the $2.5 million increase. This scope change involved more substation bays to split the transmission lines at the Good Hope, Columbia, and Golden Grove substations, as well as a modification of the Kingston substation, and an upgrade of the SCADA system to allow for fully automated operation. CMC was the general EPC contractor responsible for project implementation, However, GPL was also involved in various implementation activities. The project was originally expected to commence on March 4, 2011 and reach completion in September 2013. However, this implementation timeline slipped because of the project scope changes. A formal groundbreaking ceremony, which was attended by Prime Minister Hinds, was held on August 19, 2011. By the end of 2011, the overall project had achieved a 13% completion rate, with 20% of the procurement phase (including delivery to Guyana) and 65% of the design phase complete. A project completion ceremony, which was also attended by Prime Minister Hinds, was held on December 17, 2014.

Additional details

1. This project is also known as the Guyana Power and Light Transmission Project and the GPL Infrastructure Development Project. 2. The China Eximbank loan (GCL) agreement can be accessed in its entirety via https://www.dropbox.com/s/b7m66pde166hdr7/Loan%20Contract%20Gpl.pdf?dl=0. 3. On pg. 20 of GPL’s Notes to the Financial Statement for the Year Ended December 31, 2010, there is an itemized list of substation locations involved in this project, including North Georgetown, South Georgetown, and Versailles. Another source ("GPL Infrastructure Development Project nears completion") notes that, during during implementation, a new substation at Vreed-en-Hoop and a "New Georgetown" substation (instead of two Georgetown substations) were being constructed. However, the source still states that there were seven new substations. As the project went through scope revisions, it is unclear whether these different substations are the result of renamings or of major changes in the project design. This issue warrants further investigation.

Number of official sources

11

Number of total sources

16