Ministry issues notice to proceed for Deedoke hydro project

The Ministry of Electricity and Energy has issued a notice to proceed to the developers of the 60-megawatt Deedoke hydropower project in Mandalay Region.

Ministry officials signed the notice with the developers – Andritz of Austria, Kansai of Japan and High Tech Construction Trust, which is a subsidiary of Myanmar’s Shwe Taung Group – at a ceremony in Nay Pyi Taw yesterday.

The signing is seen as an important development for the hydropower sector, which has languished due to policy uncertainty since President U Thein Sein suspended the Myitsone dam in September 2011.

At a power sector working group meeting on August 8, Minister for Electricity and Energy U Win Khaing said the ministry would also soon sign a notice to proceed with a second consortium led by state-owned Électricité de France for the 1050MW Shweli-3 hydropower project in Shan State.

Deedoke and Shweli-3 are among six projects that the ministry is prioritising for development by the private sector to meet Myanmar’s energy needs over the short and medium term. Most of the projects have Western sponsors that signed memorandums of understanding with the ministry in 2014 or 2015.

Since taking office a year ago, minister Win Khaing has quietly pushed his ministry and hydropower sponsors towards finalising PPAs for their projects, which stipulate what rate the government will pay for the power generated. Several of the developers have also sought notices to proceed similar to those issued in January to the sponsors of four gas-fired projects totalling 3,000MW.

Mr Edwin Vanderbruggen, a senior partner at advisory firm VDB Loi, which is advising several of the developers, said the NTP was “commercially very significant”.

“Investors need some commercial reassurance that we are moving in the right direction with the project, or else they lose their enthusiasm. The NTP does that, while keeping quite a lot of options open for the government,” he said.

Source: FRONTIER MYANMAR

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