Electricity Sector in Guyana - Private Sector Participation in The Electricity Sector

Private Sector Participation in The Electricity Sector

Independent Power Producers (IPPs) own and operate 45 percent of the installed generation capacity, which is thermoelectric. The table below shows the generation share of GPL and IPPs:

Source: World Bank, 2007

(1) In 2005-2007, only GPL, GSC, BERMINE and AMC have sold electricity to the grid.

IPPs are mainly large corporate firms that generate power for their own needs and sell excess capacity to the national grid. In the last few years, there have been formal efforts to enhance the relationships between IPPs and GPL; these include co-generation projects, plans for Power Purchase Agreements (PPAs), and explicit interest government interest in renewable energy projects. The expectations for capacity growth are reliant on the participation of these independent producers.

A significant enhancement of the regulatory framework will be required in order to ensure the viability of GPL as a potential private venture, and to encourage further private investment. While private participation is desirable, it may also not lead to significant improvements when regulatory capacity is weak and enforcement of contracts is insecure, as is the case in Guyana.