Myanmar: Hydro favoured over coal as ministries review power plans

Myanmar: Hydro favoured over coal as ministries review power plans

Myanmar is considering changes to a long-term electric power strategy that
would see greater reliance on hydropower and less on coal-fired plants,
officials have told Reuters newsagency.

The review of the strategy comes as the government tries to attract foreign
investment to boost energy production.

The increase is needed to support economic development and to sustain an
economic growth rate of about 8 percent, among the world's highest.

The plan, shown to Reuters by officials at the Ministry of Electricity and
Energy, had originally provided for coal's share in the energy mix to rise
from 3 percent to 33 percent by 2030 and for the contribution from
hydropower to fall from 63 percent to 38 percent.

The re-evaluation of the plan reflects a reluctance by investors to back
coal-fired plants because of environmental concerns.

"Hopefully hydropower will be the majority in the new plan," U Aung Ko Ko,
director of the hydro and renewable energy planning branch at the ministry,
told Reuters. He estimated its share at 50-55 percent by the 2030-31 fiscal
year, and said imports of liquid natural gas could make up for some of the
reduction in using coal to generate power.

Energy and Electricity is among nine key ministries, including Industry and
Natural Resources and Environmental Conservation, which are coordinating on
a master plan for energy strategy that is due for completion by the end of
September.

The process has included a review of 49 hydropower projects approved by the
previous government, of which 31 include Chinese investment and involve 11
Chinese companies. The companies include state-owned CPI Yunnan
International Power Investment Co that is behind the suspended US$3.6
billion Myitsone dam project.

A resolution of the impasse over the dam could help to make more Chinese
funds available for energy projects, a senior official at the ministry's
Department of Hydropower Implementation told Reuters.

"In my opinion, the developers of these projects [on the list] cannot get
loans from Chinese banks because of the problems with Myitsone," he said.

The list also includes five government projects that have been delayed
because of a lack of funding and seven being built by Myanmar companies. The
remainder would need to be financed through cooperation with foreign
investors.

The government may open fresh tenders for some of the stalled hydropower
projects and seek loans from international financial institutions, the
official said.

He said the World Bank and the Asian Development Bank were among the
international lenders interested in supporting electricity and energy
projects. However, the private-sector lending arm of the World Bank, the
International Finance Corporation, has expressed reluctance over funding
coal projects because of environmental concerns.

Power consumption in Myanmar is one of the lowest in the world. Per capita
use averaged 164 kilowatt hours in 2013 - the 11th lowest in the world,
according to World Bank figures, and roughly equal to that of Sudan and
Togo.

"We need investment from abroad," he said, but added that investors in the
sector currently face "so many risks, so many transactional challenges".

"JICA [Japan International Cooperation Agency], IFC, World Bank and ADB have
asked the government how to optimise and overcome these challenges," Aung Ko
Ko told Reuters.

"But the government is very new and they need time to optimise the power
sector development," he said.

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Ref:
http://frontiermyanmar.net/en/business/hydro-favoured-over-coal-ministries-r
eview-power-plans

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com