Chinese State Firm, HK’s VPower to Implement Three Electricity Projects in Myanmar

YANGON—Amid the government’s efforts to avoid power shortages across the country, a Hong Kong company has announced that its joint venture with Chinese state-owned CNTIC will invest in three power plant projects in Myanmar with a total capacity of 900 megawatts (MW) and an estimated value of over US$800 million (1.2 trillion kyats).

Hong Kong-listed VPower Group International Holdings Limited, one of the largest investors in Myanmar’s electricity sector, this week said it had set up a joint venture with Chinese state-owned China National Technical Import and Export Corporation (CNTIC) to provide power in Myanmar.

VPower said each company held a 50 percent share in the investment, development and operations of the planned projects.

CNTIC is a subsidiary of China General Technology Group Holding Ltd. based in Beijing, one of the largest state-owned Chinese conglomerates, investing in machinery manufacturing, pharmaceuticals, engineering contracting, construction, real estate and technical consulting.

VPower gave no details of the projects in Myanmar.

According to the Myanmar Investment Commission (MIC)’s investment approval documents, the joint venture received approval in January this year and November last year to proceed with three foreign-owned power projects to generate and sell power to consumers locally.

In late January, MIC approved a $297.39-million (433-billion-kyat) gas-fired power plant at Thilawa port in Yangon’s Thanlyin Township. The project is expected to produce 350 MW of electricity.

The MIC documents show that in November, the government gave the green light for the JV to invest in two other gas-fired plants in Thaketa Township, south of Yangon, and Kyaukphyu Township in western Myanmar’s Rakhine State. It said the Thaketa plant was expected to produce 400MW with an investment of US$363 million (528 billion kyats).

With an estimated cost of $140 million (204 billion kyats), the Kyaukphyu plant also aims to generate 150MW, which is expected to distribute 20 percent of its power to Rakhine users and 80 percent to the national grid.

Kyaukphyu is in a key location for Chinese President Xi Jinping’s Belt and Road Initiative. Myanmar and China signed a framework agreement for the Kyaukphyu Special Economic Zone in November 2018. The project gives western China access to the Indian Ocean and allows its oil and gas imports to bypass the Strait of Malacca.

According to MIC, VPower has invested in Myanmar’s power sector since 2015. In October 2019 the company announced it won a tender for the implementation of a 20 MW gas plant approved by Myanmar’s Electric Power Generation Enterprise (EPGE).

The company has also invested an estimated $65 million (95 billion kyats) in a 90-MW power plant on land owned by the Ministry of Electricity and Energy in Taung Tha Township, Mandalay Region.

It also invested in a 145-MW gas power plant in Kyaukse Township in Mandalay Region in a joint venture.

In January, VPower received approval from MIC to implement a 21-MW power plant at Kyun Chaung in Magwe Region.

Myanmar has Southeast Asia’s lowest rates of access to electricity, experiencing regular blackouts during the hot season. Hydropower remains Myanmar’s main source of electricity, followed by natural gas and heavily polluting coal.

Electricity and energy minister U Win Khaing said last year that the ministry aimed for 55 percent of the population to have access to power by 2020-21, 75 percent by 2025-26 and 100 percent by 2030-31.

The ministry predicted up to 1,600 MW of shortages this year. Last year the government said it planned to buy 1,000 MW from the Guangzhou-based state-owned enterprise China Southern Power Grid to cover some of the shortfall.

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Source : The Irrawaddy

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