Government to Purchase Electricity from Private Firms

Published on Monday, 08 October 2012 12:42

The Ministry of Electricity will purchase electricity from two private companies authorised to generate electricity for the public.

Diamond Star Company in the Kyimindine township of Yangon region, and Pacific Electric Company in Chan Mya Tharzi and Chan Aye Tharzan townships of Mandalay regions, are the two companies licensed to generate electricity.

“Private companies will sell the electricity at 80 kyats per unit to the government. The government will distribute the electricity at 50 kyats per unit, subsidising the loss with profits from state-owned hydropower projects,” said a ministry officer.

The ministry has also agreed to purchase all the electricity output from the private sector to encourage private investors.

The companies will generate electricity at full capacity in their respective towns even in summer when the country usually encounters power shortage from the hydropower projects.

The ministry has signed agreements with a Thai company, which will generate 100 megawatt  (MW), as well as with Korean, Chinese and Thai companies with a capacity of 500MW each.

The ministry will also permit more private firms to generate electricity across the country.

Although the domestic demand for electricity in 2012 is estimated to be 1,850MW, the supply amount is only 1,500MW – 1,100MW from the hydropower project and 400MW from natural gas turbines. Demand for power is expected to touch 3,000MW in 2015.

The Diamond Star has the permit for local distribution of Pepsi soft drinks. It also operates a wheat factory, distributes fertilizers and runs Capital Hyper Market.

The Pacific Electric Company was set up by engineers, and it is engaged in construction of power posts and electric transformers.

Demand for electricity in the country is increasing by 15 per cent each year. Electricity consumption in Yangon city in 2006 was 550MW, and increased to 850MW in 2011.

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