U.S. power developer pulls out of $858 mln Guyana project
GEORGETOWN Aug 12 (Reuters) - U.S.-based power developer Sithe Global has pulled out of an $858 million hydroelectric generation project in the South American nation of Guyana, citing political wrangling that prevented it from obtaining financing.
Sithe Global, majority owned by hedge funds managed by investment giant Blackstone Group LP, said the Guyanese parliament had not fully supported legislation needed for the Inter-American Development Bank to provide financing for the 165-megawatt dam.
"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," Sithe Global said in an ad published in Guyanese newspapers Sunday.
A planned $100 million IADB financing deal required unanimous parliamentary backing for legislation creating environmental protections for the area around the site and raising government loan guarantees to state-owned companies.
The country's main opposition party, A Partnership for National Unity, opposed the measures on complaints of mounting costs and lack of transparency in the project's construction.
A former Guyanese auditor general noted the expected price of the Amaila Falls dam was now almost triple its previous estimates, adding it appeared to cost double that of similar projects in Brazil.
The government says the cost of the Brazilian projects did not include building roads and transmission lines.
President Donald Ramotar insists the dam is crucial for lowering power bills and reducing the former British colony's reliance on polluting diesel-fired generators.
Guyana also wants to boost generation capacity as it stimulates its nascent mining industry.
Ramotar on Monday said he wants the project to continue, though it was unclear if he would seek to woo Sithe Global back.
Sithe Global is 99 percent owned by funds managed by Blackstone, which purchased an 80 percent interest in 2005 and increased its stake to 99 percent in 2011.
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