Daw Ei Phyusin Htay, Managing Director, Barons & Fujikura EPC: Interview

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Daw Ei Phyusin Htay, Managing Director, Barons & Fujikura EPC

Interview: Daw Ei Phyusin Htay

What is the best strategy to electrify Myanmar’s rural and most remote areas?

DAW EI PHYUSIN HTAY: Given the low availability of funding and some regulatory problems affecting power generation and transmission, we cannot let rural communities wait any longer. The government, and sector players, need to be creative and consider new, cost-efficient and reliable power alternatives for rural communities. These communities remain disadvantaged compared to urban areas because they are not a priority in the government’s electrification and subsidy plans. Instead, they are left in the hands of private companies which charge much higher tariffs than they can afford.

At present, limited financial resources make the electrification of small areas an impossible task, and the best way to bring electricity to these areas would be through the construction of small off-grid systems financed through a public-private partnership (PPP) framework that brings together the private sector and regional governments. Such systems could encompass robust hybrid technologies which, at a later stage, could be connected to the national grid.

However, to make such projects viable two things should take place: first, regional governments need to showcase their willingness to participate in PPP deals and, second, the Ministry of Electricity and Energy (MoEE) should provide the sector with clear policy guidelines on either feed-in tariff systems or the discounted asset repurchase of such micro-grid systems. The lack of a clear regulatory framework is a central concern for investors in the sector.

How can priority infrastructure needs in terms of power generation and national grid be expanded?

EI PHYUSIN HTAY: Building up a robust transmission and distribution capacity is among the most pressing priorities, even more than investing in generation. The weaknesses of the transmission and distribution systems are visible and a threat to the financial sustainability of the power sector as a whole. Today, most private investment is being channelled towards power generation, while technical and non-technical losses in the transmission and distribution sector remain unaddressed. Without strengthening the transmission and distribution systems, essential for returns on investment and revenue collection, the power sector will not be financially sustainable.

In which areas could the governance structure for national electricity sector provision be improved?

EI PHYUSIN HTAY: The electricity sector in Myanmar is fully vertically integrated. The generation, transmission and distribution arms of the industry are controlled in full by the MoEE, which also acts as the de facto regulatory body for the sector, even if the law mandates the Energy Regulatory Commission to perform that task.

I believe the industry would benefit from collapsing its vertically integrated structure with the distribution segment being completely corporatised, allowing for the penetration of funding from the private sector. A regulatory body needs to be established to ensure the provision of safe electricity to the people. The transmission segment is important for national security and it should, therefore, be owned and operated by the MoEE. Whereas, the generation segment could combine public and private investment.

The Electric Power Generation Enterprise (EPGE) could function as the entity responsible for investment in power plants and the purchase of energy from an independent power producer (IPP). A separate regulatory body should oversee both the EPGE and IPPs. This would establish the foundations for the financial sustainability and better governance of the sector and would support mechanisation. Industry reform will take time and one cannot expect it to happen overnight. The government needs a properly devised plan and reform should be implemented in stages with the goal of having establishing a regulated environment for the sector.

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The Report: Myanmar 2018

Energy chapter from The Report: Myanmar 2018

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