The Ministry of Electric Power has signed an agreement with Korea’s Export Import Bank for a US$100 million loan to fund a 500-kilovolt transmission line.
The project is the first to receive funding from South Korea’s Economic Development Cooperation Fund during the period of the civilian government, though there had previously been several planned projects worth up to $240 million, said Export Import Bank chair Lee Duk-hoon.
The 500kv transmission line will connect Taungoo with Kamanat, both in Bago Region, to improve energy transmission closer to Yangon. It will stretch 188 kilometres, aiming to help improve electricity consumption in the country.
While the project will ultimately benefit domestic electricity users, there is also a political element to the project.
“It can be assured that [the transmission line] plays a main role in the economic cooperation between Korea and Myanmar,” he said.
U Htain Lwin, managing director of Myanma Electric Power Enterprise, said the agreement is still quite general and there are more details to be agreed on.
“We are going to use Korean equipment and technology through the loan program once we have chosen an appropriate contractor,” he said.
The loan bears an interest rate of 0.01 percent and is repayable over 40 years – with the first 15 years being interest free.
Deputy Minister of Electric Power U Aung Than Oo said the agreement to implement this line had been signed in July.
The transmission project will meet international standards, helping to avoid frequent energy shortfalls.
“Electricity consumption is increasing year by year, therefore this project is important to reduce electricity losses and other problems,” he said.
South Korea’s ambassador to Myanmar, Lee Baek-soon, said Yangon has long had an infrastructure shortage even as the local economy has improved.
Embassy figures show total approved foreign investment from South Korea to Myanmar was at $2 billion by July, while January to September bilateral trade stood at $9.6 billion.
State-owned Myanma Electric Power Enterprise is attempting to build more transmission lines in the country, though there are several areas outside the national grid.
Lines are being extend in Chin and Mon states in the next financial year, while lines in Rakhine State will be completed this year, he said.
Source: MYANMAR TIMES