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Industry Overview: Myanmar Power Industry

The Myanmar economy is poised to become one of the fastest growing nations in the world. The power sector holds the key for economic growth in the country and hence provides a lot of business opportunities in the coming future. Installed power capacity for fiscal 2011-12 was estimated at 2,544 megawatts, up from 1,717 megawatts four years ago.

Electricity from hydropower plants contribute nearly 70% of the total electricity generated in Myanmar followed by 22% produced from natural gas and 8% from coal. Currently, there are 19 hydropower, one coal-fired and 15 gas-fired power station in Myanmar, generating 2,660 megawatt (mw), 120 mw and 714 mw of electricity respectively, which try to meet the current demand. The country faces regular power outages as the production fails to meet the demand standing which has shot up by 15% in 2012 and has led to the current power crisis.
Looking at the importance of this sector, the government is making efforts to attract investment which will help in improving the infrastructure in the country. With the passing of the new foreign investment law and with more reforms in the pipeline, the government has planned for a capacity of 50 GW which would entail an investment of roughly $50 billion in the power generation sector alone. With an eye on increasing consumption levels, they have already invited foreign investment in this sector.
The Government has entered into an Memorandum of Understanding  with Japanese J Power Company to build a 600 megawatt (MW) coal-fired plant which would take three or four years to complete. They have also got into an agreement with BKB Consortium (Korea Western Power Co and Hyundai Engineering and Construction Co Ltd) and Hexa International Co., Ltd to build 500MW gas-fired power plant in Thakayta Township under the BOT/JV system. The project includes two gas turbines, two head recovery stream generators and one stream turbine. Myanmar has also signed an agreement with the Toyo-Thai Corporation Public Company to conduct a study to build a natural gas-fired and combined cycle 100-megawatt power plant. 
Diesel generated power is a familiar source of electricity in many parts of rural Myanmar that lack utility grid. Recently the government of Myanmar purchased 6 generators from Caterpillar and two 25-MW gas turbines from General Electric to provide back-up supply of electricity to the country.
Myanmar has a very antiquated power distribution system with some cables are as old as 40 years. The Transmission & Distribution (T&D) segment, which was under state monopoly, has been opened up for foreign investments in 2012. In March 2012, India's central transmission utility PGCIL acquired a contract to set up 268 miles of 230 KV transmissions and supporting sub stations.  To increase the electrification ratio, the Myanmar government plans to set up as much as 5,000 miles of 230KV transmission lines with eight substation projects to support the grid. This would generate investments worth $1 billion over the next ten years.
As industry and services are expected to grow in Myanmar the demand for power will also grow. Electricity-starved Myanmar wants to beef up its dilapidated power grid with investments of $26 billion over the next decade and in the wake of government's openness to reforms there are significant short-term and long-term investment opportunities for foreign companies across the power industry value chain.
(Source: Insight Alpha)

J Power Company