Solar Investors Slam Myanmar’s One-Month Bid Deadline
By Aung Thiha 26 May 2020
Yangon — Potential investors have criticized the Ministry of Electricity and Energy over a solar power tender with a one-month deadline to make a bid.
The tender, issued by the ministry on May 18, invites companies to bid for the construction of 30 ground-mounted solar projects capable of generating 1 gigawatt (GW) under a 20-year build, operate and own contract. The minimum investment is set at US$20 million per site.
Among the 30 proposed solar sites are four in Ayeyarwady Region, seven in Bago, six in Magwe, five in Mandalay, four in Sagaing, three in Naypyitaw and one in Yangon.
Myanmar-based investors say the one-month deadline is too tight to even meet given COVID-19 travel restrictions as well as the time needed for land documentation. Foreign investors cannot visit potential sites as Myanmar has banned international flights until June 1 and imposed strict quarantine measures on business travelers.
“The criteria are not too strict. But the main problem is land documentation and we can’t travel to the sites due to COVID-19 travel restrictions. Obviously, the one-month deadline is not long enough,” said director U Hla Win Shwe of Sun Shine Yangon Co., which planned to bid for three solar projects in Naypyitaw, Bago and Magwe.
He suggests extending the deadline to at least 45 days or two months to conduct land surveys and settle disputes in land acquisition.
The electricity ministry’s permanent secretary U Soe Myint said his ministry is rushing to meet increasing electricity demand.
“We want to grab some time to fulfill the public need. This is to meet the public needs next year. We have invited tenders transparently,” U Soe Myint told The Irrawaddy.
Businesses have complained about the conditions, including that the plants need to start operation within 180 days after the letter of acceptance is issued.
Investors are concerned that imported equipment will not arrive on time due to COVID-19.
“The deadline poses challenges as international flights are banned. It is a bit tight though we can hurry to meet it,” said managing director U Lin Htun of US-based Quasar Resources LLC, which plans to bid for the solar projects.
Energy analyst U Aye Kyaw Kyaw said the tight deadline could affect quality. “Electricity distribution is a long-term business. I want the process to be systematic and not hasty,” he said.
The electricity ministry predicts that Myanmar will need around 6GW in the 2020-21 fiscal year, about double the current capacity.
In partnership with Chinese firms, the ministry has been implementing liquefied natural gas (LNG)-fired power plants capable of generating over 1GW in Yangon and Magwe regions and Rakhine State. Those projects were scheduled to come into operation during the current hot season, but they were not completed on schedule. Frequent power outages have occurred in April and early May.
There were also criticisms when the government invited companies to bid for the LNG plants and build them in seven months, breaking even in less than five years. The firms were due to be paid in kyats.
Myanmar’s State Counselor Daw Aung San Suu Kyi opened the country’s first solar power plant in Minbu Township, Magwe Region, in June last year. The plant is currently producing 40 megawatts and sends power to Rakhine State.
Hydropower is the main source of electricity in Myanmar, accounting for more than two-thirds of supplies, while coal-fired power plants provide only 1 percent, with the rest coming from natural gas and solar power.
Of over 10 million households in Myanmar, only around 4 million are connected to the national grid. Electricity demand has increased by 15 percent annually over the past few years, according to the electricity ministry.
Translated from Burmese by Thet Ko Ko
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