LOS ANGELES, July 11 – Even as U.S. President Barack Obama announced the easing economic sanctions on Burma, calls arose for stepped up investment in the Southeast Asian country – especially its dilapidated power sector.
“Easing sanctions is a strong signal of our support for reform and will provide immediate incentives for reformers and significant benefits to the people of Burma,” Obama said.
The President his decision will allow U.S. companies to undertake business responsibly in Burma, also known as Myanmar, adding that they will also be required to report on their activities with the country to enhance transparency.
Despite the easing of sanctions, Obama said the U.S. is aware that more needs to be done in terms of reforms in the country, especially transparency.
“Burma’s political and economic reforms remain unfinished. The United States government remains deeply concerned about the lack of transparency in Burma’s investment environment and the military’s role in the economy,” Obama said.
The recent easing of sanctions by Western countries against Myanmar could prove to be a cornerstone in the nation’s economic development, according to consultants Frost & Sullivan.
As Myanmar’s economy attempts to take off from its current position, the California-based firm said the power sector holds the key to support rapid economic growth in the currently power-starved country.
“The demand for power shot up by 15% in 2012 which has led to the current power crisis,” said Vishal Narain, Industry Analyst for Frost & Sullivan’s Asia Pacific Energy Practice.
“A lot of projects in the recent past have increased the power generation capacity but only 13% of the country’s entire population has access to electricity,” Narain said.
As the reform process proceeds, Frost & Sullivan said Burma is likely to attain higher consumption levels in less than two decades, which means a capacity of up to 50 GW in that time frame.
“This would entail an investment of roughly $50 billion in the power generation sector alone,” the firm said.
“The scope to bridge the impending power demand-supply gap offers huge investment opportunities for both the multinational and domestic companies across the power industry value chain from generation to transmission and distribution and in distributed power generation including power rental sector,” said Narain.
“Myanmar has so far relied heavily on hydropower projects which puts power generation at the mercy of rains,” Narain said. But he expects the government to move away from hydropower and encourage “a diversified mix” in power generation.
“This could pave the way to more investments in conventional thermal power plants,” Narain said.
The statement by Frost & Sullivan came as Marubeni Corp was awarded a Gas Turbine Overhaul for the Ywama Combined Cycle Power Plant in Myanmar from Myanma Electric Power Enterprise.
Marubeni built the Ywama Combined Cycle Power Plant in 2005, and said the overhaul work will result in an improvement of reliability of electricity supply and recovery of electricity loss by approximately 34,000 kW.
© Glamma Productions Inc. 2012