US$6M boost for GPL expansion programme
by Sharon Lall
September 30, 2000
AMERICAS and Caribbean Power Limited (AC Power), one of the main players in the Guyana Power and Light company, has made an equity injection of US$6M to the Government.
The sum, equivalent to G$1.1 billion, will help in GPL's expansion programme planned for the coming year.
Americas and Caribbean Power is owned by the United Kingdom-based Capital Partners (CDC) and Ireland's Electricity Supply Board International (ESBI).
"As envisioned in the October 1, 1999 agreements for the transaction, AC Power is honouring its commitment to contribute an additional US$6M of the total US$23.45M purchase price for its 50 per cent interest in GPL," Prime Minister Sam Hinds yesterday told reporters.
The handing over of the new share certificates took place at the Prime Minister's office, Wight's Lane, Kingston, Georgetown.
The payment was made on the first anniversary of the closing of the power deal. Two additional capital contributions by AC Power will be made to Government on October 1, 2001 and on a similar date in 2002 to bring the investment to its full US$23.45M.
"The Government continues to be pleased by the cooperative manner in which AC Power has worked with it over the past year in moving forward toward achieving stability in Guyana's power supply," the Prime Minister remarked.
"Based on our ongoing liaison with AC Power as shareholders, we in Government look forward to significant development in GPL's power delivery over the coming year and to working closely with GPL on establishing the new expansion programme in short order," he added.
Commenting on earlier concerns about GPL's electricity supply, the Prime Minister said the Government wants electricity improved as rapidly as possible.
"I don't think there should be an impression that there is any kind of bad feeling and bad blood (between Government and GPL)...we want for GPL that not only must management be performing well...we want all 1,200 Guyanese in GPL to perform well," he maintained.
Mr John Lynn, Director of AC Power, said the company is having discussions with a number of commercial banks, including the European Investment Bank and Inter-American Development Bank (IDB) to access funding for GPL.
"There is a positive outlook from each of those agencies for our funding requirements but we are still negotiating on the details," Lynn said.
He added that during the last year, GPL has invested in additional capacity at its Canefield station and that should come on stream within the next few weeks. Investment was also made at the Garden of Eden station and that will become evident later this year.
"....the investments would take time for the benefits to come through," Lynn said, adding "...we expect to see significant improvements by the end of next year. We believe we are still on track to achieve that."
To date, AC Power has invested some US$15M in GPL. The first US$9M was invested in GPL a year ago.
The company is reported to have been working over the past year to create a major expansion programme for the utility. This programme could involve US$50M being injected into the system over the next five years.
According to Lynn, much of GPL's effort in 1999 had been focussed on bringing business disciplines to the utility, improving generation, billing and collection systems, and creating expansion plans.
"Our investment programme depends on funding from three sources: equity, bank loans and internally generated funds. The internally generated funds depend on timely payments by all customers of their electricity bills," says Noel Hatch, Chief Executive Officer (CEO) at GPL.
He said GPL in the next two months will be making announcements about specific projects to be initiated in 2000 and early 2001 to substantially enhance the quality of power supply.
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