Information sourced from the public domain indicates that the Myanmar Government is in the process of seeking approval from the Pyidaungsu Hluttaw (Myanmar’s Parliament) to take out a USD300 million loan from multilateral agency, Asia Development Bank (“ADB”) to expand Myanmar’s national electricity grid in seven regions and states (“Project”).
The Ministry of Electricity and Energy (Myanmar’s electricity regulator) (“MOEE”) commented that the Project plans will cover Yangon, Ayeyarwaddy, Bago and Tanintharyi regions and Mon, Kayin and Rakhine states. It is expected that the total Project costs will be circa USD 308.9 million, with the ADB loan covering up to USD 298.9 million in Project costs and the Myanmar Government funding the remaining USD 10 million.
Under the terms of the loan, it is understood that the ADB has granted a grace period of eight years and a repayment period of 24 years (total 32 year loan period). During the grace period only 1% interest must be paid annually. During the repayment period, it is understood that the rate is 1.5% with biannual payments. The loan is a low interest loan.
As part of the Project, an additional ten miles of 230kV transmission will be constructed in the Yangon Region in order to cover the whole Project area. Over 77 miles of 230kV transmission line connecting Mawlamyaing-Ye-Dawei will be constructed to supply electricity to Tanintharyi Region. It is envisaged that comparable expansions of 66kV and 33kV lines and construction of new substations will be carried out in Ayeyarwaddy, Bago, Mon and Rakhine.
This Project will assist in reducing power shortages, brownouts and black outs in key strategic investment regions. We see this as a great Government and multilateral initiative that will support Myanmar citizens, foreign and domestic businesses.
Through our office in Yangon, Duane Morris & Selvam advises corporations on investment, business and regulatory processes in Myanmar. For further information, please contact Mr Krishna Ramachandra (kramachandra@duanemorrisselvam.com), Ms Babita Ambekar (bambekar@duanemorrisselvam.com), Mr Priyank Srivastava (psrivastava@duanemorrisselvam.com), or Mr CN Beilo (CBLo@selvamandpartners.com) or visit www.duanemorrisselvam.com. Duane Morris & Selvam is recognised as a leading law firm for Myanmar related Corporate, M&A and Projects (including Energy) work – The Legal 500 (2017 & 2018).
