Guyana: Government Nears New Karpowership Agreement; GPL To Announce Details Soon

The Government of Guyana is nearing the completion of negotiations with Karpowership, a Turkish energy company, to secure the ongoing operation of two floating power plants that provide nearly half of the country’s peak electricity demand. Minister Deodat Indar, responsible for Public Utilities, indicated that a formal announcement from Guyana Power and Light Inc. (GPL) is forthcoming.

Recent negotiations have been intense, particularly following the expiration of the previous two-year power purchase agreement between GPL and Karpowership. The negotiations reached a critical point when Karpowership issued a written ultimatum to the Ministry of Public Works, demanding a restructuring of commercial rates to avoid disconnection of its offshore generation assets.

Karpowership’s demands included an increase in the baseline rate for its 36-megawatt vessel in the Berbice River from US$0.076 per kilowatt-hour (kWh) to US$0.095/kWh, which is the same rate charged for a larger 60-megawatt powership in the Demerara River. This proposed increase could result in an additional daily cost of approximately US$15,760 to the national treasury, raising the annual rental bill by around US$5.8 million.

Currently, taxpayers are already contributing a daily rental fee of US$235,000, which increases significantly when considering fuel consumption and logistical support. The reliance on these floating power plants stems from delays in the Wales Gas-to-Energy project, which is not expected to reach full capacity until mid-2027. As the new Karpowership contract is finalized, attention will turn to whether the negotiations resulted in a lower rental rate or if the government will incur the additional costs to maintain energy supply.

Source: hgptv.com