Sithe Global, a US-based power developer, is withdrawing from the $858m Amaila Falls hydro project in Guyana after the national parliament failed to secure unanimous support for a legislation for the project.
The company owned by investment giant Blackstone Group claimed that political inconsistencies in the country has cost them funds from Inter-American Development Bank (IADB) for 165MW hydropower project.
IADB has proposed to provide $100m funds upon condition of unanimous parliamentary support for legislation aimed at environmental security for the area around the site, besides raising government loan guarantees to state-owned companies.
The national opposition party, A Partnership for National Unity, has raised objections regarding the project’s surging costs and the transparency in the development process, reported Reuters.
In a native Guyanese newspaper ad, the company issued a statement saying, "The project cannot move forward, despite 16 years of work and over US$16 million of independent Sithe Global expenditures and more than US$15 million of government expenditures."
Guyana President Donald Ramotar said the $250m environment protection deal with Norway, of which $80m was to be utilized for the project, would be affected with Sithe abandoning the project.
"The US$80 million we have earned by selling carbon credits to Norway is in real danger of being lost since this was to be plowed into this project as our equity," Ramotar added.
The national government has signed an agreement with Norway, under which the latter committed $250m investment if Guyana could stem the growing deforestation problem.