Hong Kong-based company to resume work on electric power projects in Yangon

The Hong Kong-based VPower company, which ceased operations on two electric power projects in Myanmar in 2021, has announced plans to return to Myanmar this month, according to sources in the city’s manufacturing sector. The liquefied natural gas (LNG)-fired power stations that the company plans to operate in Yangon’s Thanlyin and Thaketa townships are primarily used to supply electricity to the city’s industrial zones. An industrial employee involved in sourcing electric power in Yangon told Myanmar Now that the reopened, VPower-run plants will use imported LNG fuel bought from Thailand’s state-owned energy giant PTT. VPower previously held stakes in two electric power projects using natural gas from a ship docked in Thilawa Port, launched in 2020 during the government of the National League for Democracy (NLD) party. The Hong Kong-based company pulled out of the projects in 2021 amid economic and political turmoil following Myanmar’s military coup. “VPower will resume operations. They estimate it will be around November,” the industrial employee said. “We’ve had discussions with them about the rising fees for electric power, and the word is that it will cost about 900 kyat [US $0.22] per unit.” “We also heard about their working with Thailand’s PTT,” he added, also noting the reopening of power plants in the city may present convenient opportunities for the city’s manufacturers, who are currently only able to access electricity in limited quantities and on a rolling schedule. The Thilawa power station was operational before the 2021 coup but closed after becoming unprofitable in the tumultuous months following the military’s takeover. The LNG carrier ship that had been docked in Thilawa port, supplying fuel to the power plant, also departed. Another industrial employee, who also spoke to Myanmar Now on condition of anonymity, said VPower had built nine gas-fired generator stations in Thilawa and Thaketa townships, only one of which is currently operating. However, he said, there are plans to start using the others soon. The same source said that VPower was initially supposed to exercise sole operating control over the project, including both LNG imports and power generation, but that the junta had since granted permission to PTT to import LNG fuel. “Myanmar didn’t want to make purchases in dollars, only in kyat. However, PTT can’t use Myanmar kyat abroad,” he explained. “So, this raised the problem of how to raise enough in dollars, with the Central Bank deliberating over a solution for two years. It seems to be settled now, so they’re importing.” VPower was negotiating deals with businesses in Yangon’s industrial zones on an ad hoc basis by the middle of 2023, signing contracts to provide electricity for three months at a time, and at rates of around 400 kyat [US $0.10] per unit, the source said. He continued by noting that the junta is trying to avoid dramatic changes to power metre rates ahead of the upcoming elections planned for December in January, but that the rates might increase in February, subject to resumed negotiations with business in the industrial zones. The industrial employee expects the rate to rise to as much as 800 kyat [US $0.20] per unit. “I think what they want—700 or 800 per unit—is a bit much,” he said. “Because when the economy isn’t doing well, everyone is just struggling to survive. Far from being concerned with profits, we’re just hoping to avoid the collapse of our businesses.” Further details about LNG imports, the plan for paying foreign companies, and the process for setting rates for electric power remain unconfirmed. VPower has not responded to Myanmar Now’s queries about the resumption of operations at power plants in Yangon. With economic conditions remaining poor in general and ongoing stagnation in Myanmar’s manufacturing sector in particular, it remains to be seen whether electric power generating projects like those in Thanlyin and Thaketa can supply electricity for Yangon’s industrial zones for the long term, according to one economic analyst. The 400-megawatt Thaketa project was initially planned as the CNTIC VPower YG1 Limited project with combined investments of more than US $363 million from VPower and the Chinese entity China National Technical Import and Export Corporation. The same entities planned to back the 350-megawatt Thilawa project—then called CNTIC VPower YG2—with more than US $297 million. Before the rising dollar exchange rate, an increase in global LNG prices, and the accumulation of unpaid service payments provoked VPower’s exit and brought the projects to a halt, they were able to sell electricity at a rate of US $0.12 per unit in Myanmar’s domestic market.

Hong Kong-based company to resume work on electric power projects in Yangon

Two projects, initiated under the civilian administration of the National League for Democracy (NLD) and suspended after the 2021 military coup, have reportedly resumed operations

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