Japanese conglomerate Sumitomo Corp has been awarded a ¥5-billion ($41 million) deal to build two units of gas-fired power plant next to the Japanese-backed Thilawa Special Economic Zone (SEZ), which is 25 kilometres from Yangon.
The power plant will have a total capacity of 50 megawatts (25MW for each unit), Sumitomo said in a statement.
The order was placed by Myanma Electric Power Enterprise (MEPE), a state-run utility corporation affiliated with the Ministry of Electric Power.
The power plant will supply electricity to both the SEZ and Yangon, Myanmar’s commercial hub.
Another Japanese company Mitsubishi Hitachi Power Systems Ltd will supply key components, namely, turbines and power generators, while Taihei Dengyo Kaisha Ltd will supply other parts, including accessory facilities for the plant.
Operation of the power plant is expected to begin in March 2016 for Unit 1 and July 2016 for Unit 2.
Since the nominally civilian government came into office, investments into Myanmar’s power sector have picked up as the country struggles to supply electricity for majority of its people. Ensuring stable and on-site electricity has also been a major concern for manufacturing companies that are looking to shift their base to Myanmar.
In line with the expected rapid economic growth of Myanmar, electricity demands are expected to increase fivefold by 2030.
In 2013, a yen loan agreement was signed between the Japan International Cooperation Agency (JICA) and the Myanmar government to support the improvement of infrastructure in Myanmar, under which the Sumitomo power plant project has been proceeding.
Along with one local company, a total of 21 bid-winning firms from Japan, China, Hong Kong, Taiwan, Thailand, Sweden, the US and Australia have signed contracts with the Myanmar-Japan Thilawa Development (MJTD) Co Ltd, a Myanmar-Japan joint venture.
The commercial run of Thilawa SEZ is expected to start in mid-2015.