Investors hesitate to invest in power sector

NAY PYI TAW — The deputy minister for electric power has denied claims in parliament that plans to increase the price of electricity was aimed at pleasing investors.

The government will now charge Ks 20 per unit of electricity, according to deputy minister Aung Than Oo, which will cover production, construction and maintenance of hydropower plants, overheads, heavy machinery, maintenance, salaries and more.

The deputy minister was replying to a complaint by Lower House MP Sandar Min who claimed that hydropower generation amounted to 80 percent of the country’s total power output.

In 2013, state-owned gas power plants provided 23.7 percent, private gas; hydro power plants provided 17.3 percent, and state-owned hydro power plants provided the bulk with 58.9 percent of total power supply.

More hydropower projects are currently being built by the government in joint ventures with foreign companies as well as private investors.

The government says that new price hikes will bring new investors and more power generation to provide up to 30 percent of the population access to electricity.

However, local and foreign investors are hesitating to invest in the hydro power projects as the break even period is too long.

The ministry of electric power has agreed to buy electricity at a price of Ks 70 per unit from Thaukyaykhat 2 hydropower project still being built by Asia World Co (Golden Energy Co) under a build, operate and transfer agreement.

The deputy denied that increased power charges may have an impact on small-sized industries.

Electricity charges for industries is proportional to their consumption, with those using between 500-10000 units paying 2.69 percent and those using above 10001 units paying 4.29 percent.

Source: ELEVEN Myanmar

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