Ayeyarwady hydro dams in limbo

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Ongoing violence and Myanmar’s incomplete legal framework are preventing the restart of development at six planned hydropower dams on the Ayeyarwady River in Kachin State, even after US$1 billion has already been invested, said an official at the firm developing the dams.

The Upstream Ayeyawady Confluence Basin Hydropower (UACBH) Company – which is majority-owned by state-run China Power Investment Corporation – is also the firm behind the controversial Myitsone hydropower dam, which was suspended by President U Thein Sein in 2011 over environmental concerns following opposition from figures such as Daw Aung San Suu Kyi.

UACBH managing director Li Guanghua revealed last week the firm spent a total of $1 billion on work so far in Myanmar, of which $330 million was on building Myitsone and the other $670 million on feasibility studies for the remaining six planned hydropower dams.

Although Myitsone was halted by presidential decree, the company will not proceed on its other six projects unless the security situation in Kachin State and the Myanmar legal climate are improved, Mr Li told The Myanmar Times on the sidelines of the Myanmar Energy Investment Summit 2013 in Yangon last week.

“The peace talks [are the first issue to be resolved]. We’re waiting for peace to be achieved in that area,” he said. The Kachin Independence Army (KIA) is in conflict with the Tatmadaw in much of the northern state.

The company also wants to ensure there is a stronger legal system in place governing foreign investments before proceeding.

“The foreign investment law has just been issued, and we’re waiting for [more] detailed regulation to come to the public,” he said.

U Maw Thar Htwe, director general of the Department of Hydropower Implementation, claimed the company had halted work primarily due to a flare-up in the fighting last year.

“The company had been building bridges, roads and other infrastructure to develop the projects. But work has stopped because of security problems,” he said.

Mr Li added further regulations including regulation on investment, environment, and energy projects will assist UACBH with ensuring it can proceed with its investments without facing stoppages.

Permission to restart Myitsone, which is slated to eventually cost $8 billion, may be some time away, he said, adding that once the benefits were explained it would be easier to convince the public it is in Myanmar’s interest to proceed.

He claimed the electricity generated from the hydro dam will be earmarked for either the Chinese or the Myanmar market depending on domestic demand.

The firm has taken over compensation efforts for the relocated villagers from the government, aiming to fairly compensate villagers, he said.

“Otherwise these people want to return to their former sites. This is also not good for the whole Mysitone project,” he said.

Although Myitsone is the only hydro dam where development had begun, Mr Li said, of the six others, the Laza project on the Malikha River is the next likely candidate after Myitsone – not for reasons of its viability, but because it is easier to reach.

“We were almost finished the feasibility study there,” he said. “The good road makes it convenient to reach Laza. It’s difficult to reach the other sites, so the feasibility study has not proceeded so smoothly.”

He pointed to the Kaunglanhpu site as having the largest potential, due to the possibility for creating a large reservoir to draw from. This reservoir could also be drawn from to increase generation at the downstream projects in the dry season, increasing the viability for them all, he said.

However, the road is currently limited that far north, he said, meaning it is some time before Kaunglanphu can be begun.

U Maw Thar Htwe said that a smaller-scale Chipwinge hydropower project capable of generating 99 megawatts was also near completion in Kachin state, but had been halted last year due to conflict between the KIA and the Tatmadaw.

Source: Myanmar Times

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