The Myanmar Investment Commission (MIC) on 30 December 2020 approved two solar power projects to be located in Sagaing Region, according to a press release. 

The details of the approvals are as follows:

These are the first of the 30 solar projects tendered out this summer to receive MIC approval. It is likely that the other 28 viable projects will receive their approvals in the coming months. MIC approval is necessary for developers to receive benefits such as tax exemptions on equipment imports.

Both projects approved last month are to be developed by JVs comprising local Shwe Taung Development and China’s GCL System Integration Technology. 

We note that it is surprising that the Aungchanthar project has been approved by the MIC, as the Electric Power Generation Enterprise (EPGE) has not yet announced the issuance of a letter of acceptance (LoA) for the site. 

An LoA for Nyaungpingyi was awarded on 5 October 2020, along with 15 other projects as follows:

Another seven projects received LoAs on 16 October:

The EPGE has yet to announce LoA issuances for the following projects:

Of the 30 sites tendered out this summer, which have a combined generation capacity of 1,060MW, a 30MW project to be connected to the Belin substation in Mandalay’s Kyaukse Town did not receive any qualifying bids. 

A challenging implementation timeline

The tender winners announced so far will now need to shift their focus to implementing their projects within the tight six-month timeline and in the context of ongoing COVID-19 restrictions. 

While domestic travel has resumed to some extent, regulations for travelling between areas with different rates of COVID-19 transmission are somewhat unclear. 

Despite a previous announcement that international flights would resume at the start of the year, the government subsequently announced it would extend its months-long ban until at least 31 January. 

According to the tender terms, the projects which received LoAs on 5 October are to come online by 3 April, while those approved on 16 October have a deadline of 14 April. 

So far the EGPE has not announced any formal extension of the implementation deadlines due to the previously mentioned challenges.  

However, we know from the way that the late delivery of the emergency power projects tendered in summer 2019 summer was handled that the energy ministry may ultimately permit delays.

At the same time, companies will need to pursue shortcuts to get approvals faster than necessary or receive extensions. 

For example, if any of the developers are planning to rezone farmland for their projects, the timeframe in which this is typically done would technically render the six-month implementation window impossible.

We have seen the impacts of these shortcuts and extensions in the implementation process for the emergency LNG and gas power projects tendered out last year. They have mainly contributed to a lack of transparency around project implementation. 

For example, China Energy Engineering Group’s 151MW gas plant in Ahlone still has not received MIC approval, despite reports that it has been at least partly operational for several months. It is also unclear if environmental impact assessments (EIAs) have been completed for any of the projects. 

There is also some confusion about whether firms will need to complete full EIA for the solar projects. The tender documents seem to indicate that one is required, but Myanmar’s border regulatory framework indicates that they are not necessary for solar plants under 50MW, as is the case with most of the current projects.

We assume this has been cleared up in negotiations, though no update has been shared publicly.