Sembcorp Utilities, a subsidiary of Singapore-based developer Sembcorp Industries (Sembcorp), has been selected to develop and operate a 225-megawatt (MW) gas-fired power plant in central Myanmar.
Located in the Myingyan district of the Mandalay division, the $300 million power plant marks Sembcorp’s entry in the country. It is set to become the largest gas-fired independent power plant in Myanmar, helping the nation alleviate a power deficit estimated at about 500MW during peak periods.
“The new facility will provide a reliable source of power which is integral to the country’s economic development and electrification efforts. This investment not only enables Sembcorp to establish an important beachhead in Myanmar, but also gives us a foothold to potentially develop other businesses in the country, such as water and urban development,” said Tang Kin Fei, group president and chief executive of Sembcorp.
The company will have at least an 80 percent stake in this project, with the initial investment expected to be funded through a mix of limited recourse project financing and equity. Financial close is expected in the second half of 2015.
The build-operate-transfer project was awarded by Myanmar's Ministry of Electric Power (MOEP). The government was advised by the International Finance Corporation, the World Bank's investment arm, during the bidding process.
Completion of the construction is scheduled for 2017. Operations and maintenance will come under a 22-year power purchase agreement (PPA), with MOEP guaranteeing the obligations of Myanmar's Electric Power Enterprise, the offtaker.
According to World Bank reports, Myanmar is one of the least electrified countries in the world and the lowest among members of the Association of Southeast Asian Nations (ASEAN), with just under 33 percent of its 50 million population having access to power.
Demand is expected to increase at a compounded annual growth rate of 13 percent over the next 15 years, according to government estimates.
MOEP projects that more than 20 gigawatts of additional power capacity are required between 2013 and 2030 to plug the resulting power gap, the statement noted.