Two power plants in Myanmar's largest city have been shut down due to the financial fallout from the coup

[ASEAN NOW Content Team]

 

Two Chinese-backed LNG (liquefied natural gas) power facilities in Yangon have been shut down since July due to financial difficulties, raising the prospect of more regular blackouts in Myanmar's commercial city.

According to sources from the junta-controlled Ministry of Electricity and Energy, the move was prompted by an increase in LNG prices on the international market, the depreciation of the kyat against the US dollar, a drop in electricity demand, and the regime's inability to pay electricity suppliers.

 

According to a ministry source, the 400-megawatt (MW) LNG power plant in Thaketa Township, Yangon, has ceased operations, and the 350-megawatt power plant in the Thilawa Special Economic Zone in Thanlyin, on the outskirts of Yangon, is only producing the 50MW needed to keep its existing LNG stocks cool.

VPower Co., a Hong Kong-listed company, operates the Thilawa power plant.
VPower and the China National Import and Export Corporation have partnered to build the Thaketa facility (CNTIC).

 

The ministry committed to pay for a set percentage of acquired units in US dollars in the electricity purchase agreement it signed with the providers, but it may now only pay in Myanmar currency, according to the source.

"It's primarily a financial issue."
The companies must purchase LNG in US currency.
However, they only receive Myanmar kyats in exchange for the electricity they sell in this country.
As a result, it is no longer possible.
As a result, they and the ministry have reached an agreement to cease manufacturing," the person said.

 

"It's primarily a financial issue."
The companies must purchase LNG in US currency.
However, they only receive Myanmar kyats in exchange for the electricity they sell in this country.
As a result, it is no longer possible.
As a result, they and the ministry have reached an agreement to cease manufacturing," the person said.

After significant blackouts throughout the hot season, the National League for Democracy government, which was deposed by the military in a coup on Feb. 1, asked for five emergency projects in 2019.
The LNG installations in Thanlyin and Thaketa in Yangon, as well as a 150MW plant in Kyaukphyu in Rakhine State, were the three largest.

 

In September 2019, VPower and its joint venture, CNTIC, were awarded all three projects.
Their aggregate capacity is 900MW, and the three projects cost more than US$800 million in total.

"As LNG prices have risen and the kyat has weakened, the corporations want to suspend operations."
As a result, they complained that importing LNG was problematic.
This side [the dictatorship] is also unwilling to pay the money.
As a result, they've reached an agreement," a local electricity supplier informed The Irrawaddy.

 

Senior officials from the Electricity Ministry declined to comment on the halting of production at the two LNG projects when contacted by The Irrawaddy.

VPower said in September that it has withdrawn from two power projects in Rakhine State's Kyaukphyu and Mandalay Region's Mingyan, both with a capacity of 200MW.