China, IDB, to finance $500 mln Guyana hydro project

GEORGETOWN, Nov 13 (Reuters) - Two international development banks are to finance a $500 million hydro electricity projects in Guyana, aimed at bringing down energy costs in the poor South American nation.

President Bharrat Jagdeo told reporters on Friday the Inter-American Development Bank and the China Development Bank had agreed to back the Amaila Falls project at a recent meeting in Washington.

"Everything seems to be on track to start the project by mid-next year," Jagdeo said. Details of the terms of financing are still to be agreed, he said.

Amalia Falls is located deep in Guyana's interior and has been vaunted as a potential electricity generation site for decades. The Guyana government is spending $20 million in preparatory works, such as building the access road.

The developer in the project, Sithe Global Power, LLC, based in New York, has committed financing to the tune of US$130 million, Jagdeo said.

In 2008, Guyana spent about 40 percent of the country's gross domestic product on importing fossil fuel based energy sources and is keen to develop alternative power sources.

(Reporting by Neil Marks; Editing Bernard Orr)