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Description |
The Project entails the construction and operation of a 225 MW combined cycle gas turbine power plant in Myingyan, approximately 500 km North of Yangon and 90 km West of Mandalay. |
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Objectives and Scope |
Securing long-term commercial bank financing necessary for large-scale infrastructure investments remains a challenge in Myanmar due to lack of track record and perceived high political risk. ADB has played a key catalytic role in addressing this challenge both from public sector and private sector sides. ADB public sector TA was instrumental in preparing the tender template documents and the template power purchase agreement. ADB private sector's early engagement in the bidding process with the shortlisted bidders also gave them the opportunity to optimize their proposals, and has resulted in the competitive tariff which benefits the country. Thus, the project illustrates the synergy of ADB''s public and private sector operations to undertake a PPP project from upstream to downstream seamlessly under a nascent legal and financial environment.
The project will improve the reliability and stability of Myanmar's power supply at a competitive tariff, while addressing power shortages and helping avoid future brownouts that hinder economic growth. As the first competitive tender for a gas-fired independent power producer project in Myanmar, the successful financial close and operation of this project is expected to mark a major milestone in the power sector. ADB''s substantial participation will help demonstrate the benefits of improving power supply through low-cost PPP arrangements, and signal to the government, multinationals, and international financiers that private sector-led infrastructure investments can be undertaken successfully within sectors with sound legal and regulatory frameworks.
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Linkage to Country/Regional Strategy |
The project is consistent with Asian Development Bank's (ADB) Midterm Review of Strategy 2020, which identifies inclusive growth and infrastructure development as two of the strategic priorities. The project is aligned with ADB''s interim country partnership strategy (CPS) for Myanmar, 2012- 2014. A needs assessment identified the energy sector as a critical development constraint.The summary energy sector assessment, as part of the CPS, identifies the following medium-term needs (i) tariff and structural reforms in the sector; (ii) assessment and promotion of renewable energy and energy efficiency; (iii) hydropower development policy and planning; (iv) rural electrification (expansion of transmission and distribution line projects and off-grid renewable energy options); and (v) rehabilitation and expansion of natural gas pipeline networks. The assistance is also closely aligned with the 2015- 2017 country operations business plan for Myanmar, which extends the validity of the interim CPS, and proposes focus on infrastructure investments in energy and PPP through ADB's private sector operations. ADB''s Energy Policy emphasizes energy efficient investments, least-cost supply, private sector participation, and wider access for the poor. |
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