Chinese power in Myanmar

Economic development and manufacturing in Myanmar is due to get a boost in 2018 when the country’s largest power plant comes online, thanks to a joint venture between China and a local company.

China’s Union Resources and Engineering Company will bring technological and engineering prowess to the project it is partnering with U Energy Tharketa Power Co Ltd. Together they will build a 106-megawatt gas-fired power plant in Thakayta, about 10 kilometres from Yangon and 16km from Thilawa Special Economic Zone.

The problems of intermittent power supply in Myanmar are no joke. Anyone with friends living in Yangon will likely have heard enthusiastic reports of how friendly locals, cultural wonders and thriving markets make the city a colourful and interesting place to live. However, such stories are often followed by tales of daily blackouts and brownouts. Not only are power cuts commonplace, they can last for hours at a time.

While unreliable electricity supply can be a major irritant to daily life – and I know this from personal experience, once being unable to take a shower due to a power outage – it can be disastrous to businesses, especially manufacturing, for which energy supply is a nationwide stumbling block. Downtime costs money, prevents efficient

production, disrupts supply chains and order fulfilment, and places people’s jobs in jeopardy – issues which also impede overall economic development. Many companies are unable to even start production.

Yangon, which uses half of Myanmar’s electricity, is the most developed part of the country with some of the best infrastructure. Its consumption is set to rise to 1,250MW within fiscal 2017, almost double the 690MW used in fiscal 2012.

The World Bank’s “Doing Business” report ranks Myanmar 148 out of 189 economies for

electricity supply on a nationwide basis. It takes an average of 77 days to obtain a permanent electricity connection.

Electricity costs 1,673 per cent of per capita income. By comparison Thailand ranks 11th, with a connection taking 37 days on average and electricity costing 45 per cent of per capita income.

These figures show the importance of Thakayta in providing more consistent power to homes and businesses in the Yangon region.

Even better news for manufacturers is that the plant is only the first phase of a larger plan to expand supply by 500MW.

Thakayta will be the fifth privately run power station in the country and will support state-owned plants around Yangon that are currently struggling to meet demand.

We should expect more joint ventures and public-private initiatives to help Myanmar achieve its development goals of having universal access to electricity by 2030 as established in its 2014 National Electrification Plan.

 

Source: Bangkok Bank China

 

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