Wa army-linked company collaborating with junta to build hydropower dam in northern Shan State, activists say

The construction of a hydropower dam by a company with alleged ties to the United Wa State Army (UWSA) is moving forward in contested territory along northern Shan State’s Namtu (Myitnge) River while remaining “shrouded in secrecy,” according to a local activist network. 

A report released last week by the Shan State Frontline Investment Monitor (SSFIM) described the company in question, National Current Energy Hydropower (NCEH), as UWSA-owned. 

A spokesperson for the activist network attributed the information to an internal source close to the firm and cited links between the Mandalay-based NCEH’s leadership and other ventures with known ties to the ethnic Wa armed group.

A UWSA information officer acknowledged that he had seen the SSFIM report but, at the time of reporting, had not responded to Myanmar Now’s questions regarding the allegations.

SSFIM said that NCEH—which Myanmar Now was also unable to reach for comment—signed an agreement with the junta’s electricity ministry in late April 2022 to build a 210-megawatt dam in Hsipaw Township. The project is estimated to cost a total of US$436m.

The SSFIM spokesperson said on May 19 that since then, activity has increased around the dam site and his group had been waiting for the situation to be “safe enough for an update to be released.” He estimated that the dam was 10 percent finished at the time of reporting.

“Currently, they are building housing for the workers, transporting materials, digging, and clearing the land for a road to the site,” he said.

Map indicating the location of the planned electric railway from Muse to Mandalay, in relation to the Namtu dams (Shan State Frontline Investment Monitor)

SSFIM criticised an “ongoing lack of transparency and disregard of local concerns” surrounding the project, pointing out that the dam’s capacity had more than doubled since it was originally proposed nearly 10 years ago as a 100-megawatt initiative. The group emphasised that it still had not been disclosed as being among the military council’s electricity generation projects under construction.

NCEH, it said, has been involved in the dam since 2014, when the company signed a memorandum of understanding with the then military-government for “build, operate and transfer” rights to the initiative. Community-based groups accused NCEH in 2017 of illegally clearing forests and constructing roads in the area before an environmental impact assessment could be carried out. 

Over the next two years, a local Shan parliamentarian raised concern in the national legislature about NCEH’s practices, and asked that the Namtu hydropower project be stopped. It moved forward despite these efforts, SSFIM said. 

The dam site is located some 12 miles upstream from Hsipaw Township’s administrative centre, whose 20,000 residents are believed to be put at risk by the project. 

“Parts of [Hsipaw] town are already prone to flooding from river overflow after heavy rainfall, meaning that even without dam breakage, sudden large releases of water could cause significant damage,” SSFIM said.

The threat to the town was not mentioned in a 2018 “scoping report” carried out by MyAsia Consulting—a firm hired by NCEH for the task. The report did describe the project’s safety as being “a serious concern to the people who live in the downstream area,” noting that a dam breach could result in a catastrophic disaster” and mentioned that the upstream village of Lilu and 140 hectares of farmland would be submerged in the dam’s reservoir.

A full environmental impact assessment of the project has not been made available to the public. 

Pollution to the Namtu dam reservoir from the Bawdwin lead and silver mines is also a threat, and since the February 2021 coup, excavation at the mining site, some 25 miles upstream from the Namtu dam, has been “resuming at a fast pace,” according to SSFIM.

The dam is one of five hydropower projects proposed along the Namtu River; the Yeywa, with a capacity to produce more than 700 megawatts of electricity—was completed in 2010. Two more dams remain in the planning stages: the Middle Yeywa and the Deedoke.

The Namtu project in Hsipaw is one of two currently under construction—the other being the 280-megawatt Upper Yeywa in neighbouring Kyaukme Township, set to be completed this year and threatening to flood an area of 100 villages and home to 40,000 people. 

SSFIM noted that NCEH is also simultaneously constructing a nearly 50-mile 230kV electricity transmission line connecting the Upper Yeywa and Namtu dams. 

The transmission line’s location, which crosses the route of a planned electric railway connecting the Shan State-China border town of Muse to Mandalay, has caused SSFIM to speculate that electricity generated by the Namtu dam will power the Chinese transport project, “rather than serve local people’s electricity needs.”

SSFIM also pointed to the recent arrival of more than 100 Chinese workers at the Namtu dam site who do not speak Burmese as “supporting the widely held assumption that this is a China-backed project.” 

The network condemned the UWSA, which has a close military and political relationship with China, for “directly profiting” from the Namtu dam’s construction. 

SSFIM also noted that the project is located in an area where several other ethnic armed organisations are active, raising “serious questions” about these groups’ priorities, particularly given the strong opposition by area communities and the “interests of the illegitimate [military] regime.” 

Map indicating the armed groups active around the Namtu River dam sites in northern Shan State (Shan State Frontline Investment Monitor)

Among them are the Shan State Progress Party and Ta’ang National Liberation Army, known to be close to the UWSA. Myanmar Now was unable to reach either group for comment. 

The fact that construction has been able to continue in this “highly contested landscape” suggests that “security guarantees have been obtained from the various armed actors,” the network added. 

“It would be impossible for the project to proceed without the permission of the armed groups in the region,” the SSFIM spokesperson told Myanmar Now. “We think that because the project is backed by China and the electricity will supply the China-Myanmar railway project, it has been allowed to go ahead.”

SSFIM referenced an April 25 statement by more than a dozen Shan civil society organisations urging ethnic armed groups to stand with locals in solidarity and “use any means” necessary to stop the Namtu River dams, which they deemed a threat to establishing a future federal democracy. 

The activist network called for a moratorium on dam construction nationwide until a federal Constitution is adopted that would allow “local communities to protect their own natural resources.”

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