Myanmar lures power project sponsors in global energy players amidst reforms

In 2018, the government has approved two projects in excess of 1,000MW.

When Myanmar first launched its massive national electrification agenda, many international players were understandably cautious over pouring funds into the newly-opened country. But now, energy projects are being approved at an unprecedented pace, and investors are benefiting from a range of government reforms.

VDB LOI’s senior partner in Myanmar, Edwin Vanderbruggen commented, “We have noticed a shift in the profile of the sponsors of power projects. Since 2018, we see involvement by major global energy players.”

Joo Yeow Lee, IHS Markit senior research analyst, noted that four notices to proceed (NTP) - the equivalent of MOUs in other countries - have been issued to fast-track development of plants with total capacity of 3,111MW. In 2018, the government has approved two projects in excess of 1,000MW, namely the LNG to power projects of Total Siemens at Kanbauk, and of Zhefu/Supreme Trading in Ayawaddy. The government also approved a project in excess of 600MW, the Shweli 3 hydropower project of EDF and Marubeni. Three other power projects below 200MW were also approved - TTCL’s Ahlone LNG project, Sinohydro’s gas-fired plant in
Kyauk Phyo and the Deedoke hydropower project.

Also read: What are the woes in Myanmar's energy mix?

Another change in Myanmar is the reform of the procurement process. Under the new rules, a sponsor would receive a notice to proceed from the Ministry of Electricity and Energy. “The new procurement process has some important advantages. It narrows the range of commercial negotiation room between the parties, and factors such as tariff range, the currency and main points of risk allocation will be much closer between the parties by the time the NTP is issued,” Vanderbruggen added.

Lee said that capacity is set to grow as demand has risen from over 6TWh in 2010 to almost 16TWh in 2016, setting the yearly rate at 10%. Myanmar has set its electrification target to 100%, and so far, it has reached 37%, a notch higher compared to 30% in 2016. It currently has 5GW of installed capacity, mainly composed of hydropower and gas.