While residents of Myanmar protest over electricity – sometimes on pricing, other times on access and most recently on environmental concerns and Chinese involvement – foreign investors are watching Myanmar’s opening economy with hungry eyes. It’s a country with a huge population, low electrification rates and a robustly growing GDP that desperately needs more reliable energy. Myanmar allows power producers to export the bulk of the power produced domestically to neighboring countries, despite its own unmet demand. But legal roadblocks, opaque regulatory structures, a highly subsidized electricity program and an angry populace only boost the risk profile for independent power producers (IPPs) and foreign investors.
With the loosening of sanctions, interested investors are arriving from outside Myanmar’s neighborhood. In April of last year, after opening its Asian operations, Florida-based APR Energy identified Myanmar as a key area for growth. This is the first American power company to enter since the sanctions were eased APR Energy is building a 100MW gas-fired power plant about 50 kilometers (31 miles) outside of Mandalay making it one of the largest thermal power plants in the country.
While investments from China, Thailand, Japan and South Korea remain strong – and analysts say interest is as much about a geopolitical play for dominance in the region as it is about financial returns and producing power
Myanmar is under tremendous pressure to get the frame work and laws right. Not only that, but the
government body in charge of investments – the Myanmar Investment Commission – is bombarded with projects from small-scale timber mills to big oil and gas projects. Still, the government has a powerful ally with the World Bank working on an investment prospectus. Of the two billion dollars the World Bank committed to the country, half is earmarked for electricity.