Singapore Firm Says it Secured Funding for Moulmein Power Plant
By Kyaw Hsu Mon 24 February 2014
RANGOON — As Burma struggles to meet rising energy demands, an increasing number of foreign energy firms are entering the country. On Monday, Singapore’s Asiatech Energy announced it secured funding to build a gas-fired power plant in the Mon State capital Moulmein.
The company released a statement in Naypyidaw saying that signed a financing agreement with Singapore’s United Overseas Bank (UOB) allowing it to begin work on the 230-megawatt project, although the firm failed to disclose how much funding it had secured.
Asiatech Energy said the plant would initially be able to produce 43 megawatt later this year, adding that its construction is expected to be completed by late 2015, when it would be able to supply energy to 5 million people.
The gas-fired plant will reportedly cost about $170 million to construct.
Asiatech Energy will work with Myanmar Lighting Co Ltd, which will own the plant, and Myanmar Electrical Enterprise, which will distribute its energy.
“The financing of Asiatech Energy’s project is in line with our approach of supporting the businesses building the infrastructure that is necessary to drive the region’s economic growth,” said Frederick Chin, managing director at UOB’s Group Wholesale Banking.
Last week, UOB announced that it would work with US-based APR Energy to construct a 100-MW power plant in the Mandalay region.
Also last week, MAXPOWER (Thaketa) Company Ltd, a subsidiary of Singapore’s Navigat Group, announced that it signed a long-term power purchase agreement with the Burmese government. The contract was the first such agreement between a foreign energy firm and the government, and will reportedly serve as a template for further foreign energy investment in the country.
MAXPOWER said it spent $35 million building a 50-MW gas-fired plant in a suburb of Rangoon.
According to the Asian Development Bank, only 30 percent of Burma’s population of around 60 million people currently has access to electricity, while the country’s energy needs are projected to greatly increase in coming years.
Recurrent blackouts and energy shortages are severely hampering industrial development and investment in the impoverished country.
Myat Thin Aung, chairman of Rangoon’s Hlaing Tharyar Industrial Zone, said poor energy infrastructure was one main the reasons why foreign direct investment has fallen short of expectations. “Even we local investors do not yet have enough regular electricity for daily production, so it’s a big challenge for foreign investors,” he said.