Oppsoition Leader Arnhim Eustace, has expressed concerns about the financing arrangement for this country’s geothermal project
Opposition Leader Arnhim Eustace, has expressed concerns about the financing arrangement for this country’s geothermal project

Opposition Leader Arnhim Eustace has expressed concerns about the financing arrangement for this country’s geothermal project, which in into the testing phase.

Speaking at the New Democratic Party’s (NDP) annual convention on Sunday, Eustace asked what “larger prize” multinational energy company, Emera, was eyeing in this country, according to Prime Minister Dr. Ralph Gonsalves.

Emera has electric utilities in the Northeastern United States, Atlantic Canada, St. Lucia, Grand Bahama and Barbados, a pumped storage hydro-electric facility, natural gas pipelines, a gas-fired power plant, an energy services company and a renewable tidal energy company.

Gonsalves referred to “larger prize” the statement as he addressed Vincentians in New York in September about geothermal energy potential here.

Iceland-based firm, Reykjavik Geothermal and the Clinton Climate Initiative are also partnering in the project.

Speaking at the town hall meeting in New York, Gonsalves said: “Now, no one seriously believes that Emera will come to St. Vincent to put in the facilities to generate only 10 megawatts of power. They have their eye on a larger prize.”

(Read: SVG could begin exporting energy to Barbados, PM Gonsalves says)

At the launch of the testing phase of the project on Nov. 1 in Kingstown, Gunnar Orn Gunnarsson, chief operating officer of Reykjavik Geothermal, said it could cost US$50 million to construct a 10-megawatt geothermal power plant here.

He, however, said his company is prepared to make the investment because it is confident of the geothermal energy potential here.

(Read: Geothermal power plant in St. Vincent could cost US$50 million)

Eustace told his party’s 37th annual convention that reducing the cost of energy is a “super priority” for the NDP, noting that the cost of energy impacts cost of living and the cost of doing business.

He further stated that the country has to find the mechanism to reduce electricity cost, adding that he believes geothermal energy can make a difference.

‘grave concerns’

“But I have some grave concerns with the government and what they (the government) have started to do with geothermal energy, because it reminds me of what they did with NCB,” Eustace said in reference to the former state-owned bank, which was partially privatised in 2010.

He said that for the past 12 years, the Dr. Ralph Gonsalves Unity Labour Party (ULP) administration has been talking about alternative energy but has accomplished nothing.

Dominica, on the other hand, started a geothermal energy project in 2007 and has done exploratory drilling, has proven that they have the geothermal energy, and are moving to build an actual power station, but are using public funds to do so, Eustace said.

He further said that Dominica’s plan is to export energy to Guadeloupe and Martinique at a later stage of the project.

Eustace said that compared to Dominica’s project, everything that Gonsalves is talking about up to this point is “mere speculation”.

Gonsalves is putting up a national plan with some timelines, Eustace said, adding, “election is around the corner, so don’t be fooled”.

General elections are constitutionally due in December 2015.

Eustace spoke of the agreement that the government signed with a firm in 2008, for geothermal exploration to begin in 2009.

He noted that there was no performance and the person involved disappeared.

“He tricked Gonsalves,” Eustace said, adding five years after that initial agreement, no drilling for geothermal energy has started in this country.

“It took Dominica five years to reach where they are, before they build the power station. He (Gonsalves) wants to do it in four years, including building the power station, and he ain’t put out no money yet.

“This is not the statement of a credible person. That is the statement of a man who is placing another election gimmick in front of you, hoping that you will fall for it,” Eustace said.

“We are here to tell you some of the truth on this. And it is not as nice and easy as it is made to sound.”

Eustace said it a fact that to date, there has been no definite assessment of how much geothermal energy exist in the La Soufriere mountains.

He further stated that he has been advised that drilling a geothermal well is like drilling for oil and a geothermal energy well is 4 to 6 inches in diameter, and be up to 4,800 feet deep.

He noted that surface explorations are taking place and said while this is necessary, it will not answer the questions of whether energy is underground.

“This brings us to the point, who is financing what is going on now?” Eustace said, and asked whether it is the state-owned electricity firm, VINLEC, or the government.

‘no experience’

“We have checked on the Net to find out about Reykjavik Geothermal and we can’t find a project that they did yet … in the world.

“They are just starting to do some projects, they have no experience of how you complete a geothermal project anywhere; but they are out there. So, are they spending their own? It seems so…” Eustace further said.

He referred to Gonsalves’ statement to Vincentians in New York about Emera having their eyes on “a larger prize”.

“What is this larger prize? Do no underestimate that question. What is the larger prize that Emera has their eyes on? And why would Ralph Gonsalves, the prime minister of a sovereign state, be interested in the larger prize to be acquired by a private company?

“… This is a big question and it would come back to haunt every man woman and child in this country,” Eustace said.

He said that in 2007 Dominica applied for and secured grant funds from the European Union to finance its geothermal energy exploration work and has spent over $32 million on the project so far.

“You going to tell me that Emera and Reykjavik going to spend $32 million out there?

“So, what has in fact happened is that the prime minister has passed the geothermal project over to the private sector — foreign private sector.

“… What will happen if or when they (Emera and Reykjavik Geothermal) prove that we have the energy, when they have spent over 30 million of their own money to look for it? You think they are going to pass it over to us? You think they are going to pass it over to VINLEC? Or are they going to take over VINLEC?” Eustace said, noting that Emera owns the power company in Barbados.

 VINLEC to be next NCB?

“So Are we going to be something happen like what happened with NCB, where the bank gone, to be owned by somebody else, and VINLEC gone, to be owned by somebody else? What are we going to see? That’s the question I want answered.

… I don’t understand how we can agree to go forward on that basis without any clear definition of what happens at the end of the process.”

Eustace said this country should have gone to the European Union to and try to secure grant funds.

“He (Gonsalves) boasted this week about how he got back Chatham Bay, the patrimony of St. Vincent and the Grenadines,” he said in reference to a recent Privy Council ruling that returned to the state lands that two investors bought 26 years ago.

(Read: 100 acres of beachfront land in Union Island returned to Gov’t after Privy Council order)

“Well, this is another piece of our patrimony. I want to know whether you are going to give it away,” Eustace said, adding that when the private sector finances something, they expect a good return on their investment.

“We have to have a mechanism to finance these types of activities without detriment to the long-term future of people of St. Vincent and the Grenadines. It is our contention that that investment should not be made by those two private companies,” Eustace said.

2 replies on “Opposition Leader expresses concerns about financing of geothermal project”

  1. This old dunce always concerned about everything because he has no clue what is going on. Why is taxpayers money being wasted on this old incompetent fool?

  2. Correct me if I am wrong, but I believe the guy from Reykjavik Geothermal indicated that the SVG government will have to come up with much of the money to start the project. I previously wrote that the government may have to sell BONDS and other financial papers to meet the cost. If the Reykjavik Geothermal people finance the project with their own money, then they will own the company and VINLEC may be history. The government must come clean with all the information this time. The airport issue shows how things can go astray when everything is done behind closed doors. Ralph should come clean with the exact price for the airport and he may have more support, even after Vincentians see that it can bankrupt the country, because there is no turning back now. The airport has to be completed no matter which party forms the next government. I also don’t believe the cost of electricity will be reduced. On the contrary; it will increase to cover the initial cost of the project.

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