Project description
On May 15, 2019, MIGA issued guarantees of up to US$112.9 million covering the non-shareholder loans and associated hedging investments by commercial lenders, Clifford Capital Pte. Ltd, DBS Bank Ltd., and Oversea-Chinese Banking Corporation Limited, to the Sembcorp Myingyan Power Company Limited for the 225-megawatt combined-cycle gas turbine power plant in the Tuang Thar Township, Myingyan District of the Republic of the Union of Myanmar. The guarantees are available for up to 17 years and will provide coverage against the risks of currency inconvertibility and transfer restriction, expropriation, war and civil disturbance, and breach of contract.
On March 31, 2018, MIGA issued guarantees of up to US$57.4 million covering the equity and shareholder loan investments by
Sembcorp Utilities Pte Ltd [1], to the project. The guarantees are available for up to 10 years and will provide coverage against the risks of currency inconvertibility and transfer restriction, war and civil disturbance, and breach of contract.
The project involves the development, financing, construction, testing, commissioning, operation and maintenance of the 225-megawatt combined-cycle gas turbine power plant, on a build-operate-transfer basis. The project will be operated on gas supplied by the Myanma Oil & Gas Enterprise and sell power to the Myanmar Electric Power Enterprise.
Environmental Categorization
The project is a category A under MIGA’s Policy on Environmental and Social Sustainability. Click here to view the Environmental and Social Review Summary prepared by the International Finance Corporation (IFC) for their investment in the project.
Development Impact
The project is the first IPP project in Myanmar to be awarded based on a competitive bidding process. The success of the project will demonstrate to power developers and operators, the sustainability of public and private sector partnerships in the country’s power sector, as well as encourage more private and foreign direct investment into Myanmar.
The project will help address the current severe power shortage in Myanmar. In addition, the project’s combined-cycle gas turbine is more energy efficient than single-cycle gas power plants currently in use in the country, thus providing efficient power generation whilst reducing overall green-house gas emissions.
The project will create significant employment opportunities during the construction and operational phases, and through downstream economic activities.
MIGA’s support for this project is aligned with the agency’s priorities of supporting investments into countries eligible for financing from the International Development Association, Fragile and Conflict Affected Situations, and transformational projects. It is also aligned with the World Bank Group’s Country Partnership Framework with Myanmar that aims to implement a nationwide electrification program – with a target of achieving universal energy access by 2030.
[1] The shareholder loan guarantee to Sembcorp Utilities Pte Ltd was cancelled on January 31, 2022. Equity guarantee remains in place.
