Singaporean company pulls out of Myanmar energy project

Singaporean investment holding company Avarga Limited has announced that it is pulling out of an energy-generation project in Myanmar after more than a decade in the country. In a statement to the Singapore Stock Exchange dated July 10, the company said it was selling its 100 percent stake in the Ywama power station in Yangon to another Singaporean company, GreenGen Pte. Ltd., for around US$10 million. Registered in Myanmar as UPP Power Myanmar, Avarga has invested more than $46 million in the project since its inception in 2014. According to the statement, the company said it would no longer have any involvement in the project under the deal. In its 2023 annual report, Avarga noted that its operations in Myanmar had deteriorated significantly since the 2021 coup, and that the plant was producing less electricity than required under its power purchase agreement (PPA). “Our electricity generation rates fell below the PPA standards and we also faced several challenges brought about by the sanctions of the USA and other Western countries,” the company said in its report. The report also cited other factors, such insufficient supplies of natural gas and foreign exchange restrictions imposed after the military takeover, as reasons for the project’s poor performance. The company was actually cleared to operate the power plant for up to 30 years. It was expected to generate, sell, and distribute 350 KW of electricity to the Myanmar government every year. Yangon seen during a power cut at night (Supplied) According to a former government official with close ties to the junta’s energy ministry, the plant relies on natural gas from Myanmar’s Yadanar offshore gas field to operate. “The Ministry of Electricity and Energy arranges for the purchase of natural gas. Total, a French company, used to supply the gas, but now it comes from PTTEP, a Thai company,” the official said. One possible reason for the company’s departure could be the regime’s decision to start paying for the generated electricity in kyat rather than dollars, according to the official. He also noted that the company might be having trouble transferring funds to and from Myanmar due to Western sanctions. In August 2021, Hong Kong-based energy company VPower also withdrew from two electricity-generation projects in Myanmar due to “political events and social unrest” in the country. The 400 MW Thaketa power plant in Yangon and 350 MW Thilawa power project in Thanlyin Township were both shelved because of the company’s concerns about instability in the wake of the coup. The decline in energy output over the past three years has had a far-reaching impact on the country’s economy. According to a report released by the United Nations Development Programme in April, the coup and its aftermath have shrunk the size of Myanmar’s middle class by half while pushing its poorest deeper into poverty.

Singaporean company pulls out of Myanmar energy project

The company, Avarga Limited, said that its operations in Myanmar had deteriorated significantly since the 2021 coup

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