Power is essential in the creation of new industries and jobs for Myanmar.
Mr. Frederick Chin, Managing Director and Head of Group Wholesale Banking of United Overseas Bank.

As the sun sets over Mawlamyine township, the roads and homes of Myanmar’s fourth largest city are alive with activity. Gently lit riverside restaurants, serving a fusion of Burmese and Thai dishes, are bustling with diners. Families gather in homes to watch television. The odd street light illuminates main roads and helps keep drivers safe.

These evening scenes are widely different from those witnessed just a few years ago. Located in one of the least electrified countries in Southeast Asia, unreliable and unequal access to power has long been an aspect of everyday life for those in Myanmar, also known as Burma. But with the coming online of a 230-megawatt (MW), state-of-the-art gas power plant in 2014, businesses and households in Mawlamyine are no longer left in the dark.

Cross-border investment

Located a six-hour drive from the commercial city of Yangon, also known as Rangoon, the Mawlamyine plant was made possible by Singapore’s United Overseas Bank (UOB). In 2014, the bank backed Singapore company Asiatech Energy to construct a combined-cycle gas power plant.

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“Power is essential in the creation of new industries and jobs for Myanmar,” said Frederick Chin, UOB’s managing director and head of group wholesale banking. “We are proud to have played a role in a project that is bringing power to 5 million people in Mawlamyine township.”

Operated by Myanmar Lighting, the Mawlamyine plant will bring a sustainable supply of power to residents and businesses in Mon State. The project is the latest in a number of power projects financed by UOB. It also financed Royal GK in procuring gas engines for the construction of a gas-fired electricity power plant in Yangon, which was completed last June and now produces 175,000 MWh of electricity a year.

Speaking from Singapore, Chin was keen to clarify the driving factors behind their work in Myanmar.  “Our capabilities as a regional bank allow us to support our customers in their business expansion.” he said.

Universal electrification

Since economic liberalisation in 2011, Myanmar’s economy and appetite for energy have rapidly grown, but its grid struggled to keep up. With a supply-demand gap threatening to put a stranglehold on economic growth, in 2014 the government outlined a National Electrification Plan and a target to deliver universal access to electricity by 2030. The task was daunting; it meant powering up an electricity network that was ageing, unreliable and reached less than a third of the country. It would also come with a hefty price tag of $6 billion.

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With such a large sum needed to power the country, the government sought assistance from overseas partnerships, which are now helping to expand the grid to town and rural areas in all corners of the country.

The power sector’s investment shortfall was bridged by international development agencies such as the Japan International Co-operation System, the Asian Development Bank and German development bank, KfW. To date, The World Bank is the leading supporter of Myanmar’s electrification ambitions, approving a $540 million interest-free loan to help the country achieve its 2030 goal.

Aside from development agencies, foreign investors like UOB are critical to ensuring Myanmar’s generation capacity can keep up with its growth. Companies from Singapore, China, the US, Thailand, Japan and other European and Asian countries have made major investments in the energy sector in recent years.

UOB Mr Frederick Chin

“Myanmar is a country undergoing rapid transformation and has a fast-growing economy,” said UOB’s Chin. “Investing in large-scale base-load projects like the Mawlamyine plant is a win-win situation. Not only do these projects help to elevate power problems for Myanmar, but as they are built in areas of high economic activity they make sound investment sense too.”

Japanese company Marubeni Corp is another investor helping Myanmar generate a steady supply of energy through base-load projects. The company is set to build a two-million-kilowatt coal-burning plant in partnership with Thai utilities. Due to begin operation in 2020, it will add much-needed generation capacity to the region and will become Myanmar's first ultra-supercritical power plant, which can operate at a higher efficiency.

Low-carbon solutions

Japan is a world leader in this technology which emits 20% less carbon dioxide than conventional coal power plants. Part of the plant’s output will be sold to Thailand, bringing in an important revenue stream. The rest will be distributed within Myanmar, providing an uninterrupted power supply that is essential to growth.

While base-load plants powered by coal and gas play an essential role in providing steady and reliable power, Myanmar’s National Electrification Plan calls for a large proportion of the country’s capacity to come from low-carbon sources. Renewable hydropower already plays a huge role in the country’s power generation and, like other developing nations, Myanmar can take advantage of many 21st-century, low-carbon technologies to meet its power needs.

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Myanmar’s solar capacity remains an area of untapped potential that has garnered interest from foreign investors. One solar project, led by Thailand’s Green Earth Power in partnership with US engineering firm Black & Veatch, is set to become the third-largest photovoltaic plant in the world with 220 MW capacity. At the same time, US private equity firm ACO Investment Group is supporting a $480 million investment in two 150 MW solar power projects in Thar Se and Na Buu townships in the Mandalay region.

Combined, the GEP and ACO solar projects could add about 12% of much needed additional capacity – a significant addition to the grid and all from a completely renewable and clean source of energy.

Sparking transformation

“Myanmar’s power sector has a promising outlook which is attracting a number of foreign investors,” said Chin. “Thanks to projects like the Mawlamyine plant, millions of people across the country are now gaining access to reliable electricity and Myanmar is adding significant capacity to its grid. At UOB we’re keen to finance companies that help support the infrastructural needs of the country’s economic transformation.”

Meeting Myanmar’s 2030 target will require new power generation facilities, grid connections and infrastructure renovation. By supporting projects that bring additional megawatts to the power sector, foreign investors are playing a key role in bringing power to Myanmar’s people.

At UOB we think about what’s right

Which is why we supported Asiatech Energy’s efforts to build a power plant in Myanmar, so millions can enjoy a brighter tomorrow.

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