As Myanmar continues to emerge from the shadows of isolation onto the international stage, engagement with overseas investors is deepening further.
There are some sticking points – the United States has yet to lift all of its sanctions, for example. But Ford and Coca-Cola are here, and nearly 1000 international businessmen and women visited Nay Pyi Taw last year when the country hosted the World Economic Forum for the first time.
Contracted foreign direct investment in 2013-14 topped US$4 billion.
Another US firm that is here is APR Energy, which signed an agreement with the government in 2013 to implement a power project. It’s worth taking a second look at this.
APR, which counts former US Secretary of State Madeleine Albright and billionaire financier George Soros among its leading shareholders, was selected from among other international bidders to develop a fast-track power generation project in Kyaukse near Mandalay.
Kyaukse is famous for two things: traditional elephant dancing, and for being the home town of former Senior General Than Shwe.
When he was in power at the head of the military regime, a heavy industrial zone was established in Kyaukse – supposedly to provide employment, though its population is relatively small.
Kyaukse’s industrial zone is one of more than 30 across the country. None of them has enough electricity – just as more than 70 percent of the population lacks a connection to the national grid. The country’s current power generation cannot support universal household use, despite the recent opening of hydropower and gas-fired power plant projects. In 2013, the Ministry of Electric Power was unable to exceed 2370 megawatts of electricity for nationwide consumption.
To complement its longer-term plans for improving electricity generation, transmission and distribution, the government decided to conduct a fast-power generation project to cover electricity shortages in the summer. The solution was to establish a power plant consuming 20 million cubic feet of natural gas per day.
They decided to put the plant in Kyaukse, with the gas to be piped there courtesy of the Shwe Gas pipeline project, which is operated by China’s state-owned corporation, China National Petroleum Corporation.
APR’s bid for the Kyaukse project was the first time the American company had participated in a government tender. After it won, the company imported 68 of the latest gas-fired generators, worth US$1.4 million each (APR says it has spent between $80-100 million on the project).
A team of US engineers and local experts manage the plant, producing 82MW of a total installed capacity of 103MW. The fast-track turnkey power plant was completed in just three months – but the generators will stay here for only 18 months, before APR Energy whisks them away for another project.
U Win Myint, chief engineer of MOEP’s Thermal Power Department, described the fast build time as “very impressive”.
“It’s the largest amount of electricity to be generated in the fastest period that we’ve seen in our 40 years running gas-fired power plants in this country,” he said.
The government is paying $30.5 million to hire APR gas-fired engines, and an additional K700 million (about $725,000) to build the power plant.
“This is not expensive compared to other gas-fired power plant projects. If you look at fuel efficiency and the capacity to generate this amount of electricity in a short period, it’s worth it,” said U Zaw Naing Thein, vice chair of the Supreme Group of Companies, the local partner of APR.
According to the ministry, only 15MW from the APR gas-fired power plant has been distributed to the Kyaukse industrial zone and the rest goes to national grid. The official denied rumours that some of the electricity went to an armaments factory and to other semi-government owned factories controlled by cronies.
“We just manage power generation. Distribution is not our business,” said an APR official.
While it is not clear why the plant was built in Kyaukse, U Zaw Naing Thein said it was not a political decision.
“There is no politics behind the fact that a US-based company took on this project fuelled by Chinese gas, or aiming to supply only the Kyaukse industrial zone. This is about America’s future investment. An investment deal with the government has proved to be reliable and smooth,” he said.
There has been no statement about how much APR invested or expects to profit from its 18-month power project.
Clive Turton, managing director for Asia Pacific at APR, said during the launch ceremony for the Kyaukse plant earlier this month that the tender process had been more transparent than expected and APR is hoping to expand its presence.
“We are ready to invest in this country. We are going to establish new gas-fired power plants in partnership with GE,” he said. “Now we are discussing with the ministry several projects to generate 200MW of electricity with gas turbines.”
Source: MYANMAR TIMES