The Ministry of Electricity and Energy (MoEE), Yangon Electricity Supply Enterprise (YESC) and Mandalay Electricity Supply Enterprise (MESC) will spend Ks1.2tn on power generation, power plant maintenance, electrification improvements, grid expansion and other projects in FY2020/21, according to the Ministry of Planning and Finance's recently released Citizens' Budget Report.

The annual report provides a summary of how the Union government attends to spend public funds each fiscal year. 

This year, departments within the energy ministry have allocated their funding as follows: 

Department of Hydropower Implementation

All five of the hydro projects listed have been in the works for some time and have been targeted for priority completion by the MoEE. It appears that work has been progressing on all of them in the last year, though some are farther along than others. 

In November 2019, the MoEE announced that it would resume construction this year on Tha Htay, Upper Keng Tawng, Upper Yeywa and Shweli-3. A month later, it issued tenders for consulting services on the first three of these as well as Middle Paunglaung. The winners were announced in June. 

In a presentation in August, Deputy Minister for Electricity and Energy U Tun Naing gave an update on progress on the projects. It appeared that some progress had been made across the projects, but in all cases, less than half of the ministry's allotted funding for the year had been disbursed. In particular, almost none of the funding alloated for Middle Paunglaung and Shweli-3 had been spent. 

As of the end of H1 of FY2019/20, the Upper Yeywa project located in Shan State was around 46.4% complete. The current target completion date for the project, which is being developed by Shwe Taung Group, is 2022, though this is likely to be pushed. AF Consult Switzerland was awarded a consulting contract for the project this year. 

Construction on both the Tha Htay project in Rakhine State and Upper Keng Tawng in Shan had reached around 60.5% as of the end of H1 of FY2019/20. Both are expected to be completed by FY2024/25. The Norwegian government is reportedly consulting on both projects. This year, ILF Consulting Engineers won a contract related to Tha Htay, while Changjiang Survey, Planning, Design and Research won a contract for Upper Keng Tawng. 

Middle Paunglaung was only 5.4% complete at the end of H1, only a slight improvement from 2.6% completion in 2017. It is believed the PPA for the project is still under negotiation with Singapore-based Energize Myanmar. However, AF Consult Switzerland won a contract this year to consult on the project.  

Shweli-3 in Shan State was only around 10% complete in 2016, and this improved to 11.8% at the end of H1 FY2019/20. In 2018, Électricité de France (EDF) took over as developer, and the new PPA for the project is still under negotiation. 

We note, too that halfway through FY2019/20, the MoEE chose to scrap the 380MW Manipur hydro project in Chin State for which it allotted funding at the beginning of last year. 

Electric Power Generation Enterprise

The Baluchaung-1 and Sedawgyi-1 hydro projects will be upgraded through the JPY10.7bn Hydropower Plants Rehabilitation Project funded by the Japanese International Cooperation Agency (JICA). In April this year, Toyoto Tsusho Corporation signed a contract with the EPGE to refurbish Sedawgyi-1. Toshiba Energy Systems & Solution Corporation will supply two 14MW turbines and a control system for the renovation. 

Electricity Supply Enterprise

Department of Power Transmission and System Control

Myanmar’s national grid is primarily being expanded through the main component of the National Electrification Project (NEP), which kicked off in February 2019. The NEP aims to achieve 100% electrification across the country by 2030, and it is partly funded by the World Bank. 

As of the end of FY2019/20, the electrification rate for the country as a whole was at 56%, according to the MoEE. This is slightly higher than the MoEE's previously stated 55% target for the end of the fiscal year. 

However, we note that electrification figures published by the energy ministry should be regarded with caution, as no information on the data collection methodology has been published. It is generally thought that the actual electrification rate is hovering around 50%. 

Phase 1 of the NEP kicked off in February. It was originally targeting the electrfication of 5,080 villages by September this year, though that deadline was later pushed to November. Phase 2 is to electrify an additional 4,700 households located within 3 miles of the national grid by 2021. 

The government has also approved several loans from other international development agencies to fund grid expansion and improvement projects. 

The Asian Development Bank (ADB) has extended several loans to Myanmar in this area. The $171m Accelerated Rural Electrification Project, for which an invitation for expressions of interest on a consulting contract was called this week (see separate story), aims to install and upgrade transmission lines and substations in more remote areas of the country. 

Meanwhile, the $180m Power Transmission Improvement Project is to improve the distribution infrastructure in Yangon, while the $300m Power Network Development Project includes plans to connect Tanintharyi Region to the National Grid. 

KfW German Development Bank is supporting rural electrifcation through several programs to facilitate grid connections, implement mini-grids and distribute solar home systems, with the total funding commitment for all of these coming to around $80.4m. 

Back in May 2019, the government approved a JPY83bn ODA loan from the JICA to fund various development projects to be implemented between 2019 and 2026. In particular JPY12.3bn will be used to improve electricity distribution in urban Yangon and Mandalay.

Also last May, the Union government approved a BHT1.5bn loan from Thailand’s Neighbouring Countries Economic Development Cooperation Agency to be used for transmission system upgrades in Yangon Region beginning this year. 

In September 2019, it was reported that around $51m of a $1bn soft loan from the Korean government would be used to fund work on the 230kV Baluchaung-Taungoo transmission line and related substations. 

Also of note, component B of the Power System Energy Efficiency Improvement Project approved earlier this year allots $10m of the World Bank loan to strengthen the resiliency of the country’s transmission infrastructure.

Yangon and Mandalay electricity supply corporations

In October 2019, the MoEE reported that it aimed to electrify 206 villages in Yangon and 390 villages in Mandalay located within 2 miles of the national grid under phase 1 of the NEP.

As of the end of September this year, electrification works has been completed in 189 of these villages in Yangon and 384 in Mandalay, according to the ministry.

An additional 355 villages in Mandalay located within five miles of the grid are to be electrified in phase 2, which is to finish by September 2021. No phase 2 target was reported for Yangon. It is believed that the ministry was aiming to achieve 100% electrification in the region by December 2020. It seems like this target will not be met, however. 

According to data recently released by the MoEE, as of the end of FY2019/20, Yangon Region had an overall electrification rate of 93.8%.

At the time, 20 of the region’s 21 towns were electrified via grid connection, while the other was powered by an off-grid solution. Additionally, 75.7% of Yangon’s 2,143 villages had electricity, 1,407 from a grid connection and 215 from off-grid projects. 

Mandalay Region had an electrification rate of 66.5% in the end of September. All 30 of its towns were connected to the grid, and 85.2% of its 4,799 villages had power. Of the electrified villages, 3,617 had a grid connection and 470 were powered by off-grid solutions. 

Over the course of the year, it appears that several villages in each region which were using an off-grid solution are now connected to the grid.