The Myanmar Investment Commission (MIC) has granted permission to two joint ventures involving foreign partners to supply power to areas not connected to the national grid.
“One is for households in Ye Township, and the other is for the developer of an industrial zone in Bago,” said U Than Aung Kyaw, deputy director-general of the Directorate of Investment and Company Administration (DICA), at a press conference on Monday.
The Southern Myanmar Development Co., a Singapore-Thai-Myanmar joint venture, won a contract to supply electricity to villages in Ye Township, Mon State. According to DICA, the 26-billion-kyat project will generate 10 megawatts of electricity daily with a diesel generator. The Singapore and Thai partners each hold 33 percent in the venture, while the local partner holds 34 percent.
i-Land Park Myanmar Co., an 80-20 Singapore-Myanmar venture with initial investment of $23.18 billion, will supply 19 megawatts to Singapore-backed i-Land Park Myanmar Industrial Zone in Bago Region. It will use a type of fuel to generate electricity, DICA said.
According to MIC’s statistics, in the current fiscal year, Myanmar citizens have invested 172,267.324 million kyats in four electricity-supply projects, and foreigners have invested $405.774 million in five projects.
Up to 70 percent of the country’s population, the majority of them living in rural areas, has yet to be connected to the national power grid, DICA said.
Myanmar Oil and Gas Services Society Chairman U Kyaw Kyaw Hlaing said: “Most of the rural areas are out of reach of the national grid. Even if they get electricity from private suppliers, locals have to pay 250 to 300 kyats per unit of electricity, which is five times the rate in Yangon.”
“The government should be fair to the whole country. It is not fair that electricity prices are cheap in Yangon and high in rural areas,” he added.
“It is good that foreigners are investing in the electricity sector; the more investment, the better. But it is more important that electricity prices fall,” he said.
“Rich people use a lot of electricity. The government said it loses [money] for every unit it produces. This means it is subsidizing power for the wealthy. The government should change. Only then will it be fair,” he added.
The government spends about 333 billion kyats annually on electricity subsidies, according to figures from the Ministry of Electricity and Energy.
According to the 2014 national census, 77.5 percent of the urban population uses electricity, but in rural areas, the percentage is just 14.9 percent.
Domestic electricity consumption increases by 15 percent every year, according to the ministry.
Currently, households pay 35 kyats per unit up to 100 units and 40 kyats per unit up to 200 units. Above 200 units the rate is 50 kyats.
Industrial users pay 75 kyats per unit up to 500 units, 100 kyats from 501-10,000 units, 125 kyats from 10,001-50,000 units, and 150 kyats from 50,001 to 300,000 units. The unit price drops to 100 kyats for usage above 300,000 units.