China in talks to sell electricity to Myanmar

Plan to link power grid of energy-hungry Myanmar to Yunnan's a sign of warming ties

YANGON • Energy-hungry Myanmar is in initial talks to buy electricity from China, according to officials and documents reviewed by Reuters, in the latest sign of warming ties with Beijing under leader Aung San Suu Kyi.

Since taking office in April last year, Ms Suu Kyi has sought to repair relations that were strained when a previous semi-civilian government in 2011 blocked a China- backed dam, which was supposed to send most of its electricity to China's Yunnan province.

China's appetite for the hydro project has waned in recent years, as a switch towards less energy-intensive industries amid an economic slowdown has left Yunnan province with a surplus of power.

Instead, Beijing has turned its attention to other projects that fit with its Belt and Road Initiative, which aims to stimulate trade by investment in infrastructure throughout Asia and beyond.

Three Chinese state-owned companies have proposed separate plans to plug Myanmar's national power grid into Yunnan's electricity network, according to documents reviewed by Reuters and two people familiar with the talks.

Rural Yunnan, which generates around 85 per cent of its electricity from hydropower, already sends surplus power to the more developed eastern China, as well as Vietnam and Laos.

While China has been supplying power on a small scale to some remote Myanmar towns near their shared border, the talks are the first to discuss connecting the national grids of the two countries to meet Myanmar's urgent demand for electricity.

  • Power connections

  • • State-owned China Electric Power Equipment and Technology Company signed a memorandum of understanding with Myanmar in March last year to build a high-voltage line running for several hundred kilometres from Muse in north-eastern Myanmar to Meiktila in the centre of the country, documents seen by Reuters show. The agreement was extended for six months in May this year and a feasibility study for the 500 kilovolt transmission line is under way.

    • State-run China Southern Power Grid Company (CSG) proposed a similar plan in June to carry power from Yunnan via a high-voltage cable, according to the documents.

    • A third plan, proposed by CSG's subsidiary Yunnan International Company, would use an existing cable to carry power to Meiktila from Yunnan via Muse.

With only a third of Myanmar's population connected to the grid and major cities experiencing blackouts, buying electricity from Yunnan could be a short-term solution to boost its power supply, said the two people familiar with the talks.

"China welcomes the plan, but Myanmar is still reviewing the details," said one of the people, a senior Myanmar energy official. The "government-to-government talks" were still at an early stage, the official added, with details such as price and timing still to be worked out. "It's one of the many options we are considering," the official said.

Spokesman Htain Lwin for Myanmar's Ministry of Electricity and Energy confirmed that initial talks had taken place, but declined to comment further.

While the electricity plan would be welcomed by many in Myanmar, where power consumption is among the lowest in the world, it could stoke concerns about China's growing economic clout.

Many officials in the South-east Asian country have been wary of domination by its giant neighbour.

REUTERS

A version of this article appeared in the print edition of The Straits Times on August 05, 2017, with the headline 'China in talks to sell electricity to Myanmar'. Print Edition | Subscribe