Burma - Country Commercial Guide
Energy

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-09-27

Overview

Among ASEAN countries, Burma has a poor electrification rate, and approximately half of its population lacks access to electricity.  Approximately 70 percent of the rural population relies on kerosene, candles, batteries, and power generators in their daily lives.  The lack of electricity not only threatens the economic growth of the country but also prevents the expansion of infrastructure and industrial development. 

According to the Ministry of Electricity and Energy (MOEE), the annual need for power consumption in Burma is increasing annually from 15 percent to 17 percent.  To fill the gap of energy needs, the government plans to implement an energy mix that includes hydropower, natural gas, coal, and renewable energy in order to provide electrical access to approximately ten million households as part of the National Electrification Project (NEP) plan, which envisions 100 percent nationwide electricity access by the year 2030.

The country’s electricity originates from 83 power plants, including 62 hydropower stations, 20 gas-fired plants, and one coal power plant.  The average generation cost of hydropower varies from Burmese kyats (MMK) 35 to 70 per kilowatt-hour, while gas costs vary from MMK 120 to 130 per kilowatt-hour.  The 2019 new tariff pricing was counted by electricity consumption units and categorized by domestic and industrial channels, in which the latter has been priced much higher (an increase of over 50 percent) than the former.  Even though guaranteed access to a stable and adequate electricity supply in Burma is challenging, businesses and manufacturers expect a secure and stable power supply over the long term, especially in light of the new electricity tariff rates.

In the energy sector, MOEE is taking a key role in establishing and implementing policies, rules, and regulations related to electrification, oil and gas development, and promoting foreign direct investment across the sector, and it also oversees the MEMP and the NEP.  Under the umbrella of MOEE, there are seven electricity-related departments: the Department of Electric Power and Planning (DEPP), the Department of Hydropower Implementation (DHPI), the Department of Power Transmission and System Control (DPTSC), the Department of Electric Power Generation Enterprise (EPGE), the Department of Electricity Supply Enterprise (ESE), the Yangon City Electricity Supply Corporation (YESC), and the Mandalay Electricity Supply Corporation (MESC).

In addition to the above seven authorized departments under MOEE, U.S. energy firms should understand the roles of the Ministry of Planning, Finance and Industry (MOPFI), the Myanmar Investment Commission (MIC), the Ministry of Natural Resources and Environmental Conservation (MoNREC), and the National Commission for Environmental Affairs (NCEA).

The NLD government of Burma, in conjunction with the Myanmar Energy Master Plan (MEMP) and the Myanmar National Electrification Plan (NEP), have established benchmarks to provide 76 percent in 2025 and 100 percent in 2030.  To accomplish this goal, a grid electrification rollout and off-grid program will be implemented under the NEP.  A total investment of $5.4 billion will be required to initiate the electrification rollout, and $40 billion will be required for investment in transmission and distribution.
 

Installed Capacity by Generation Mix in Burma (2020)

Source of Supply

Hydro

Natural Gas

Coal

Diesel

Solar

Total

Total Installed Capacity (In MW)

3,262 (54%)

2,496 (41%)

120 (2%)

116 (2%)

40 (1%)

6,034 (100%)

Electricity Generation in Burma (2020)

Source of Generation

Hydro

Natural Gas

Coal

Solar

Total

Total Generation Mix (MW)

1,990 (52%)

1,722 (45%)

76 (2%)

40 (1%)

3,828 (100%)

 Source: MOEE

 

Hydropower

Coal-fired

Gas-fired

Number of Installed plants

62

1

20

Installed capacity in MW

3,033

120

1,823

Number of proposed plants

51

10

1

Proposed capacity in MW

46,000

7,994

270

Number of ongoing plants

7 (out of planned 51)

1

2

Capacity of ongoing plants in MW

1,656

405

625

Source: ADB, Myanmar Energy Assessment, Strategy and Road Map

Leading Sub-Sectors

Under the NLD civilian-led government, the Ministry of Electricity and Energy (MOEE) drafted a renewable energy law with the goal of generating 8 percent of the country’s electricity through renewable sources by 2021, with 12 percent of all electricity generated in Burma to be renewable by 2025.  Currently, Burma has a total installed capacity of approximately 3,300 MW from renewable energy sources.  Burma has an abundance of renewable energy resources that, if managed efficiently, could meet its future energy requirements for sustainable development.

Hydropower:  Burma’s four main rivers, the Ayeyarwady, Chindwin, Thanlwin, and Sittaung, represent an untapped natural energy resource.  The Asian Development Bank (ADB) stated that Burma has significant hydropower potential, more than 100,000 MW of installed capacity.  Burma possesses 7.7 percent of the hydropower resources in Asia, and hydropower plants generate almost 62 percent of Burma’s power.  Burma has over 27 hydropower stations with a total installed capacity of 3,262 MW, with eight stations under construction. Five of the existing power stations were constructed on a build-operate-transfer (BOT) contract, and three hydropower stations with a combined capacity of 939 MW have been developed under joint ventures with foreign firms.

The civilian-led government has mapped out potential locations for 41 new power projects, which will be under construction from 2016 to 2031.  The new power plants are being built to increase electricity generation capacity to 29,000 MW by 2031.  New projects have to also take into consideration that during the dry season, heavy reliance on hydropower could lead to shortages in power supply.

The government is facing certain challenges implementing hydropower projects due to environmental impact issues, extensive project construction timelines, unpredictable weather conditions, insufficient financial support, defects in aging equipment, and limited coal production, according to the MOEE.

Solar: Burma has tremendous solar resources potential, especially in the middle of the country and in its extensive dry zones.  Mini-grids and solar energy home systems are renewable energy solutions that could solve power shortage problems in rural communities because they are not directly connected to the electric power grid.  As a result, the government is committing sizable resources for off-grid renewables.  The overall potential for solar power is approximately 51,973 terawatt-hours per year. 

Currently, Burma only has one utility-scale solar power project, 170 MW Minbu solar project in Minbu Township, located in Magwe Region, that has reached full commercial operation and has been producing 350m KWh annually, electrifying roughly 210,000 households.  According to MOEE, there is a plan to build two solar power plants in Myingyan and Wundwin in Mandalay region, and these are expected to have the capacity to generate 150MW of electricity each. 

Wind:  As a very first project for wind power in Burma, MOEE signed an agreement with China’s Three Gorges Corporation to develop a 30MW wind power project in Chaung Thar, Ayeyarwady Region.  Burma is an agriculture-based economy with ample land area, providing significant potential for wind-powered projects.  These could be developed in Chin State, Rakhine State, Ayeyarwady Region, Yangon Region, Shan State, Kayah State, Tanintharyi Region, Mon State, and Kayin State, essentially most parts of the country.  ADB forecasts that Burma has the potential for the development of 4,032 MW from wind energy.

Mini-grid:  Across Burma, there are already numerous hydro mini-grids and hybrid solar-diesel mini-grids in operation.  The potential for further mini-grid development in dry zones is high, particularly in the Magway and Sagaing regions.  Direct combustion and gasification are the relevant technologies for mini grids in Burma.  Mini grids could solve power shortage problems in rural communities since they are not directly connected to the electric power grid.

Under the NEP plan, the Department of Rural Development (DRD) was mandated to undertake off-grid electrification to increase electricity access in rural areas, with the help of using public funds for system enhancements.  From 2016 to 2020, a total of 434,480 households were electrified with a solar home system and mini grids in 8,568 villages providing electrical access to 2.172 million people. There are still over 19,000 villages remaining to be electrified.  As a result, the government is committing sizable resources for off-grid renewables.

Coal-fired:  All contracts for coal-fired power plants signed by the former government with international and regional companies have stalled due to public opposition and concerns about pollution and other environmental impacts.  Although Burma has estimated domestic coal resources of 540 million tons, coal extraction has remained slow due to low investment and the remoteness of the country’s identified coal sites.  

Opportunities and Challenges

Burma’s energy sector is promising due to the increasing demand for electricity and the government’s ambitious growth plans to fulfill 100 percent of the country’s electricity needs by 2035.  Energy is the government’s top priority sector, and the government is working to increase electricity access for the Burmese people.  Some of the leading sub-sectors are hydropower, renewable energy, gas, and solar.

To achieve Burma’s electrification goals, it is an opportunity for U.S. companies which include technical expertise, consultancy, engineering and design, project management services, and building, maintaining, and installation of power plants to the oil and gas, renewables, LNG and conventional power sectors.  According to the MOEE website, MOEE will need $5.8 billion to construct mediumious investment in infrastructure development and power generation is needed.  The drive to go from the current installed capacity of just over 4,800 MW to double the power capacity and low voltage lines and transformer/substations under the NEP plan.  

However, the energy sector poses some significant challenges for foreign investors, including unsettled political and economic policies, unclear rules and guidelines, and a shortage of skilled labor.  In addition, corruption, lack of transparency in the tender and procurement process, and banking issues are additional barriers.  Finally, Chinese companies and investors stand as significant competition for U.S. firms.  Chinese brands were chosen for 28 of the 29 solar power plant project tenders that opened for bidding in May 2020, and pricing is a major obstacle for U.S. companies when competing with Chinese brands.

The following are opportunities in the energy sector as highlighted by DICA pre-coup:

  • Construction of medium to large-scale hydro and gas-fired power plants in Public-Private-Partnerships
  • Realization of small-scale hydropower projects (e.g., to supply a village tract)
  • Establishment of solar energy farms and wind power farms
  • Provision of efficient and practical solar-power kits to communities currently off-grid as well as of solar-power based solutions (e.g., solar-powered pumps, solar lighting)
  • Upgrading of the current power infrastructure in urban centers and industrial zones

Rising electricity demand from 3075 MW in 2017 to between 9100 MW-14,542 MW by 2030 will make renewable energy resources, including solar, wind, biomass, and geothermal, critical in the future.  As Burma’s national grid system is weak and not accessible to most villages in rural areas, renewable mini grids can be an affordable option for rural communities.  U.S. firms with solutions for rural electrification and green or renewable energy can find opportunities in Burma.  Nevertheless, U.S. firms need to consider and monitor political changes and constant shifts in rules and regulations in the energy sector.

Resources

Ministry of Electricity and Energy
Ministry of Natural Resources and Environmental Conservation  
Directorate of Investment and Company Administration 

Contact Information
U.S. Commercial Service
Dr. Khine Wah Lwin
Senior Commercial Specialist
Email: KhineWah.Lwin@trade.gov