The Guyana Power and Light Inc (GPL) has expressed concern that the current political climate and volatile economic conditions locally are severely affecting its ability to garner investment capital to complete its expansion programme.

Lenders, the company said, have already expressed concerns about the "Guyana risk," which the company believes is the primary factor restricting it from raising funds.

In a presentation at Tuesday's Public Utilities Commission (PUC) hearing into issues concerning the operations of the power company, Chief Executive Officer (CEO), John Lynn, stated that actions which compromise the security of the company's tariff-making mechanism were likely to cause potential lenders to take an even more cautious view about lending.

The CEO's statements came in response to queries by the PUC on GPL's fulfilling of commitments spelt out in its agreement with the government. The issue of funding, according to Lynn, was fundamental to the future of the business as GPL's ability to deliver depended on the availability of funds to support the company's improvement programme.

Critics of the power company have argued that it had not made the contractually committed investment in the electricity sector. The company said that such a suggestion was simply wrong, since the other shareholder, government, had acknowledged that it had been meeting its obligations.

However it was noted that GPL ever since it was set up, has failed to reach the targeted financial position with only marginal profits being made and cash continuing to be in relatively short supply despite regular tariff adjustments.

On the issue of tariffs, Lynn pointed out that several factors impinged on it, including the much higher price for fuel, rising employment costs and other expenses. The tariff charges, he stated, also reflected the capital expenditure made to date in the company's operations.

The company, due to its position, has been forced to re-evaluate its options aimed at improving its quality of service while doing so at a lower capital cost.

He noted that the objective was set for Guyana to have an electricity supply standard that matched of North America and Europe, but added that most of the inputs to achieve this had to be sourced on the world market at international prices, and the markets of the world took no account of an individual country's ability to afford the cost involved.