Sherpa Hossainy's Blog

APR Energy Clinches Myanmar Power Contract

Posted in Energy and power, Myanmar, Uncategorized, Yangon by Sherpa Hossainy on August 24, 2014

Published in Myanmar Business Today (Vol 2, Issue 8) on Feb 14, 2014

APR Energy.

US-based APR Energy has landed a contract to build a “fast-track” 100-megawatt power plant in upper Myanmar, becoming the first American company to sign a power generation agreement with the government since the lifting of sanctions in 2013.

The facility will provide the Myanmar Electric Power Enterprise (MEPE) with a “guaranteed minimum of 82 megawatts (MW) of power generation, with plant capacity to deliver up to 100MW,” APR Energy said in a statement.

“The products we have are ideally suited to the needs of Myanmar’s power market. We plan to work with the ministry to provide solutions for further power needs within the country,” Clive Turton, APR Energy’s head of business development, Asia Pacific, told Myanmar Business Today in a phone interview.

Based in Kyaukse in Mandalay region, the plant will be run by natural gas, supplied through the Chinese-built Shwe gas pipeline, which runs from Myanmar’s Rakhine state to China’s Yunan province.

“The key deliverable of APR is … to deliver gas power generators in a very short time. Myanmar is unique in that sense that it has indigenous gas that can be used for power generation,” Turton said.

The company said the plant will be “one of the largest thermal plants in the country and will provide power to more than six million people,” in a country where about 70 percent of the population has no access to electricity, according to the World Bank.

The contract, which is on a rental basis, is due to start in the second quarter of 2014 and is expected to run through to late 2015, Turton said, declining to mention how much investment APR will make to install the power plant.

Turton said: “From APR’s point of view Myanmar is a key market. We are very keen to develop our businesses in the market and we will be looking forward to making a lot of investments in this country in this particular sector.

“There’s a growing demand for more power in the country and a low electrification rate. So, we are looking at more potential projects and we believe that our products are ideal to address the demand.”

APR said its turnkey plant, featuring mobile gas power modules (GPMs), will be “one of the cleanest power generation solutions in Myanmar and will represent a significant investment” in the infrastructure of the country.

“APR Energy will provide a bridging solution for the medium term while the country develops its long-term power generation infrastructure,” the company said in a release.

The power solutions provider said it won the contract due to its ability “to deliver to a very challenging timeframe, as well as for the efficiency of APR’s power generation technology.”

“We are delighted to have won this contract, based on our ability to optimise the use of natural gas resources in a fast, efficient, and effective manner,” said John Campion, APR Energy’s chief executive officer.

“This contract will create one of the biggest thermal plants in the country … Together with our recent installation of 130MW of new power generation in Indonesia, the Myanmar project is a great example of the real traction we are seeing in the Asia Pacific region since opening our Malaysia hub and Singapore commercial office.”

Derek Mitchell, American ambassador to Myanmar, said in a statement that doing business in an emerging market economy “does not come without its challenges, including the need to implement key economic reform policies, address infrastructure challenges, and make sure all benefit from the country’s economic potential.”

“We are confident that American businesses, with their experience and commitment to principled and transparent approaches, will make a tangible contribution to these efforts.”


Foreign investment rules in practice in Myanmar (Part 2)

Posted in Energy and power, Investment, Legal, Myanmar, Telecommunications, Yangon by Sherpa Hossainy on July 27, 2013

Part 2: Oil and gas, telecom, energy

Published in Myanmar Business Today (Vol 1, Issue 17) on May 30, 2013
Recently, international law firm Clifford Chance and VDB Loi have jointly released a briefing note on the practical implementation of the Foreign Investment Law in Myanmar. This is the second part of Myanmar Business Today’s series of sector-wise analysis based on the briefing. This week’s topic is onshore and offshore oil and gas, telecommunications and electricity generation.

The Myanmar government implemented the country’s Foreign Investment Law (FIL) 2012 with two notifications or FIL Rules, creating a practical framework to match the government’s policy of welcoming foreign investment. Both notifications, 11/2013 of the Ministry of National Planning and Economic Development and 1/2013 of the Myanmar Investment Commission (MIC), were released on January 31.

Onshore and offshore oil and gas

Oil and gas exploration, development and production are allowed for foreign oil companies under a Production Sharing Contract (PSC) with the Myanmar Oil and Gas Enterprise (MOGE).

Blocks are awarded through an open and competitive bidding process where technical experience and financial capability weigh heavily, both factors usually being in favour of foreign enterprises.

Upon being awarded a block, operators are required to set up a Myanmar company or to register a Myanmar branch of a foreign company. Once a commercial discovery has been made a new agreement is concluded within the framework of the PSC, for example a gas sale agreement.

“Notification 1/2013 only states that a JV is required for oil drilling using traditional methods with a maximum depth of 10,000 feet, but in practice, investors are required to have a local partner for exploration and production of all onshore blocks,” Edwin Vanderbruggen, co-author of the report and a partner at VDB Loi, a specialised law and tax advisory firm with offices all over Southeast Asia, told Myanmar Business Today.

However, the percentages of ownership of the local and foreign partner are left to the agreement between the parties, he added.

“Processing and construction of petrochemical facilities requires prior government approval, which will only be granted upon advice by the Ministry of Energy (MOE),” Edwin explained.

The importation, transportation, storage, sale and distribution of petroleum/petroleum products and natural gas, also requires prior approval by the MOE, according to the new rules.


The Government is expected to award two nationwide mobile telecommunications licences by the middle of 2013 through a competitive bidding process administered by the Ministry of Communications and Information Technology (MCIT).

According to the prequalification rules issued by the MCIT and based on Notification 1/2013, there is no formal requirement for a local partner. The prequalification rules are geared towards international mobile operators, but the possibility is created for these operators to conclude a consortium (and, upon awarding the license, a JV) with local or foreign partners.

Vendors of network equipment and service suppliers can, as a rule, be 100 percent foreign-owned in Myanmar. “Depending on the situation, it may be possible to obtain an MIC Permit for investments by network suppliers. The provision of domestic/international mail services and network support services are subject to prior approval by the MCIT,” Edwin said.

Electricity generation

Gas-fired power plants are usually structured as a build-operate-transfer (BOT) in Myanmar, where a foreign investor can own 100 percent of the Myanmar entity that concludes the BOT with the government. The government will normally supply gas to the developer on a pass-through basis, and purchase the electricity at a pre-agreed and indexed tariff. \

“In practice, the government harmonises the tariff cautiously, but there may be differences in various economic terms anyway through negotiation,” Edwin explained.

“Power projects are privately awarded or, more recently, through an open and competitive bidding process. The first step is usually for the developer to conclude a non-binding MOU with the Ministry of Electric Power (MOEP), and to submit a feasibility study. If the feasibility study is approved, which is usually the case, a memorandum of agreement is negotiated, which is essentially a BOT contract. Within the framework of that BOT contract, a Power Purchase Agreement, a Gas Sale Agreement and a Land Lease Agreement are concluded in due course. More or less in parallel, the project company is established and the investment licence (MIC Permit) is issued.”

The production or sale of hydropower electricity or coal-powered electricity requires the foreign owners to enter into a JV or BOT with the government. Under the agreement with the government, a royalty or a production share will usually be payable in the form of free electricity supply up to a certain threshold, Edwin said.

In virtually all cases, the investor must prepare an Environmental Impact Assessment for approval by the Ministry of Environmental Conservation and Forestry.

A gas-fired power plant with a capacity of 10 megawatts or less is not permitted to be wholly foreign-owned. The trading of electricity is prohibited to foreign investors, according to the rules.

Economic progress will stall sans energy policy reform: Report

Posted in Economy, Energy and power, Myanmar, Yangon by Sherpa Hossainy on July 10, 2013

Published in Myanmar Business Today (Vol 1, Issue 19) on June 13, 2013


An energy report recently urged Myanmar to renew its energy policy in a bid to continue its economic development.

“Without electricity and a reliable energy system, Myanmar’s economic progress will stall. Addressing this will require new sources of domestic energy, an expanded and modernised electricity grid, and innovative solutions for rural energy access,” the report titled “New Energy Architecture: Myanmar Report” said, adding that Myanmar could emerge as the next Southeast Asian frontier by renewing its energy policy.

The report, which analyses the challenges currently facing Myanmar’s energy sector and provides insights to support the country’s important energy reforms, was launched at the World Economic Forum on East Asia in Nay Pyi Taw on June 6.

“Myanmar has a historic opportunity to carve out its own niche in the global economy. Recasting its energy architecture will be pivotal to this transformation and to its economy’s sustainable development,” said Roberto Bocca, Senior Director, Head of Energy Industries, World Economic Forum.

Myanmar’s abundant gas resources and strategic position between some of the most dynamic Asian economies means it is crucial to regional energy security. As Myanmar reintegrates into the global economy, it will need more energy to power its own development.

“Myanmar is embarking on a new phase of development and the energy sector will be very important. This comprehensive and informative study will support the economic and social development of Myanmar,” said Union Minister for Energy U Than Htay.

The report identifies energy as one of the most pressing economic challenges facing Myanmar today. According to the report, 74 percent of Myanmar’s population lack access to electricity, while electrification rates average only 16 percent in rural areas, where 70 percent of Myanmar’s population live. Myanmar’s per capita electricity consumption is among the lowest in Asia.

Providing 17 specific recommendations, the report highlights the need for transparent governance and effective institutions in Myanmar as a sound basis for developing the country’s energy system. Creating a clear environmental regulatory framework will not only underpin sustainability and social acceptance of large-scale energy projects, but will also increase transparency for investors, the report added.

“To meet the country’s rapidly growing electricity demand, expand rural energy access, and ensure environmental sustainability, Myanmar urgently needs to attract investments by improving regulatory frameworks, promoting public-private partnerships, and undertaking crucial sector reform,” said Stephen Groff, vice president of Asian Development Bank (ADB).

To improve efficiency and the competitiveness of the domestic energy market, the report called for the gradual removal of energy subsidies in favour of targeted support for the poorest. To achieve an effective transformation, Myanmar needs an integrated energy plan to guide investments and sequence reforms, the report said.

“The development of an integrated new energy plan and system offers Myanmar a significant opportunity to design a path to sustainable and secure economic growth, bolstered by its energy industry,” said Arthur Hanna, Senior Managing Director, Accenture’s Energy industry group.

British company eyes major investments in energy sector

Posted in Bangladesh, Business, Dhaka, Energy and power, Renewable energy by Sherpa Hossainy on November 15, 2011

Published in The Independent on November 15

Read the article on Independent website

Digital print version

A UK-based company is set to make its mark in Bangladesh’s energy and power sector by setting up diesel generator and solar panel manufacturing plants in a bid to expand its business in developing economies.

“We want to become a premier manufacturer and supplier of diesel generators, which will be manufactured in Bangladesh and sold to both local and global markets,” said Steve Bandey, managing director of T&R Generators.

The company has already laid bare its business plan for the next five years in Bangladesh. “We want to quickly gain market penetration within the first three years,” Bandey told The Independent in an exclusive interview.

“We have several sites suggested for a factory. In January 2012, upon my return to Dhaka, we will choose the most appropriate and continue bearing in mind the possibility of an office in Dhaka,” he said.

Bandey said T&R is also eyeing investments in renewable energy sector by setting up a solar panel manufacturing factory in Bangladesh and produce quality solar panels at cheaper rates using the country’s cheap workforce.

“We will introduce the design, manufacture and supply of renewable energy based products including solar-based photovoltaic and water heating systems and wind energy products,” he said.

T&R plans to commence its manufacture of diesel generators in Bangladesh early next year and is currently in the process of design, supply and manufacture its first generator, which  will be exhibited to businessmen in January 2012, Bandey said.

Steve Bandey, managing director of T&R Generators.

“As we already have the technology and know-how, we’ll start the diesel generator plant first. Solar panel construction and manufacturing will follow on, once appropriate engineers are chosen and trained accordingly, also taking into consideration that factories are ready for use,” he added.

Bandey said strong light from sun can be used to produce high efficiency electricity in Bangladesh and T&R recognises the environmental and economic benefits of that.

“We aim to install five solar PV arrays with capacity of 50 megawatts each and it would be possible within three years. However, this project is still at the development stages,” he said.

T&R Generators Ltd, established in 1975, has enjoyed success in design, manufacture and supply of high-performance diesel engine generator sets ranging from 4.3kva to 3300kva. The British power company has extensive experience with power and power generation systems from large-scale to smaller specialist projects and has huge presence in Middle East, Africa and Asia.

T&R is currently working in cooperation with local company Home Street Builders and Bandey believes that it is important to have local liaisons. “We are also in talks with other local energy companies to assist shape our business and move swiftly ahead,” he said.

Bandey also wants to include local talents and engineers and create employment opportunities in Bangladesh through T&R projects. “It is our objective to use highly trained and skilled engineers and managers, already present in Bangladesh with the necessary guidance and support from our own team in the UK,” he said.

Explaining T&R’s reason to expand its business in Bangladesh, Bandey said: “We believe electricity is a key ingredient for the social and economic development of a country, and with the government’s policy statement and initiative for power generation companies, Bangladesh was our choice.” T&R has actually been present in Bangladesh for over 11 years with a large variety of clientele, he added.

T&R also has plans for other renewable sources in Bangladesh such as wind power, especially in the coastal and higher areas of Bangladesh where it is windier, he said.

Bandey lauded the eagerness of key government officials from Power Division, Ministry of Establishment, Dhaka City Corporation, Planning Division, Bangladesh Energy Regulatory Commission, Power Development Board and members of parliament in T&R’s business here and said that the overwhelming support had assisted with the company’s decision to move its development plans forward.

T&R logo

Bandey stressed the need to switch over to renewable energy amid depleting gas and fossil fuel resources of Bangladesh and said that poverty and lack of access to energy are closely linked.

“Bangladesh desires to make electricity available to all by 2021. This will be achieved more easily by focusing on natural resources (solar/wind) rather than extending a failing grid network; however fossil fuels will still be very important in other areas.

“Renewable energy (solar/wind) will benefit people in more rural and isolated areas, as no infrastructure is available; whereas city areas will benefit from immediate improvements to the national grid and using solar power to support the grid on new structures,” Bandey said.

The T&R managing director said solar energy might seem expensive but in the long run it is cheaper than any other energy source. Present customers must understand that the initial outlay for a solar system is expensive, however after that maintenance is very minimal and other costs are zero, he said.

“When you produce surplus electricity from the power plant, you could sell it to others and make a return on your investment. It is assumed that within 5-7 years the system will payoff,” he added.

Steve Bandey said that solar electric energy demand has grown by an average 30 per cent annually over the past 20 years against a backdrop of rapidly declining costs and prices, and this decline has been driven by manufacturing scale, technology improvements and the increasing efficiency of solar cells.

“In developing countries like Bangladesh, markets have benefited from the steady decline in solar PV prices, but they have also been stimulated by continued multilateral and bilateral development aid. This has meant that solar has been an enabling technology for developmental programmes for education, clean water and healthcare etc,” Bandey said.

He said T&R is also planning to develop a customer-centric organisation based on cutting edge technology with the development of fuel cell technology in association with a UK university’s technical team.

However, the T&R chief did not want to disclose the total amount of investments the company is contemplating but said that it will be significant.

“It is difficult to estimate costing at this moment, however I can say the more success at each stage, the more investment will continue to be added,” Bandey said.

New mark set for solar home system project

Posted in Bangladesh, Energy and power, Renewable energy by Sherpa Hossainy on October 3, 2011

Published in The Independent on 3 October 2011

Read the article on Independent website

Digital print version

The Infrastructure Development Company Ltd (IDCOL) has beefed up its target for installing solar home system (SHS) to 2.5 million units by 2014, company officials said.

The previous target was to set up 1 million SHSs by December 2012, which the non-bank financial institute achieved by June this year.

“If the current trend continues, we’ll be able to achieve the new target by mid-2014,” said Iqramul Hasan, programme officer (solar) of IDCOL.

According to IDCOL statistics, the solar programme has helped save more than 80,000 tonnes of kerosene in rural households, worth around $79.45 million and saved another $300 million in terms of costs of connection.

A man installs solar home system (SHS) on a roof in Bangladesh

“When we achieve the new target the combined capacity of the total project will be around 155 megawatts, providing electricity to more than 1 crore people,” said Hasan.

Currently the total installed capacity of the solar project is around 52MW, which serves around 50 lakh recipients.

The financier has already meted out around $172 million in loans and $34.28 million in grants for installation of SHS until June. IDCOL also plans to invest another $387 million in soft loans and $45 million in grants for the SHS programme.

Easy credit facilities and subsidies have made the programme, dubbed as the fastest growing renewable energy programme in the world, a success, said Hasan.

“We provide easy to avail financial support through our partner organisations and supply quality equipments to get solar power. For the rural people who have only seen kerosene lamps, this is a big incentive,” Hasan added.

IDCOL has installed 60,142 SHSs in Sunamganj till June, which is the highest coverage by the company in a district. With 58,836 and 39,483 SHSs, Patuakhali and Satkhira are the second and third most-covered districts, the statistics showed.

There are 30 the partner organisations that help implement the IDCOL SHS project. Among the 1 million installed systems, Grameen Shakti alone installed over .6 million and Rural Service Foundation has set up over .15 million around the country.

IDCOL had been promoting dissemination of solar home systems in the remote rural areas of Bangladesh with the financial support from the World Bank, Global Environment Facility, German Technical Corporation, Asian Development Bank and Islamic Development Bank.

It started the programme in January 2003 and its initial target was to finance 50,000 SHSs by the end of June 2008.

The target was achieved in September 2005, three years ahead of schedule and $2 million below estimated project cost.

IDCOL then revised its target and decided to finance 200,000 SHSs by the end of 2009. This was also achieved by May 2009.

Solar Cold Storage – a new horizon for farmers

Posted in Bangladesh, Business, Energy and power, Interviews, Renewable energy, Technology by Sherpa Hossainy on September 14, 2011

Published in The Independent on 9 September 2011

Read the article on Independent website
Digital print version

Farmers in Bangladesh might finally get free from the clutches of hoarders and middlemen, thanks to a novel green technology — solar cold storage.

The impoverished farmers are most often denied fair prices during harvesting season as they are forced to sell off their produce to unscrupulous middlemen, who stockpile and sell those at much higher prices later.

Bangladesh Clean Technology Company Ltd (BCTCL) is going to introduce new solar-based micro cold storages in Bangladesh at affordable prices in a bid to give the farmers a chance to store their produce and save themselves from the menacing grip of hoarders.

“The opportunists take advantage of farmers’ inability to store their produce. So they count big losses and sell their produce at a much lower price to the cold storage owners,” said Iqbal Sufi, managing director of BCTCL.

The hoarders usually store the produce for a few months and sell it later at four to five times higher prices. The farmers and customers get extorted and exploited in the process, Sufi added.

“Instead of the traditional cold storages that are used to store potatoes, we are going to introduce micro cold storages. Such cold storages can be used to store any kinds of vegetable, fruit and other agro-products,” said Sufi.

A traditional 1,000-tonne cold storage costs about Tk 3.5 crore ($473,970) and consumes a large amount of electricity. They are rarely used to store any other agro-products except for potatoes in Bangladesh.

Micro cold storages are usually 100-500 tonnes in size and run solely by solar power. It has a backup generator, which is only used initially to achieve the standard cooling temperature.

A 100-tonne capacity micro cold storage costs around Tk 35 lakh ($47,400) and there is little or no electricity cost incurred.

Infrastructure Development Company Ltd (IDCOL) has expressed interest to finance the project with assistance from the World Bank’s renewable energy development funds. BCTCL will submit the project proposal to IDCOL within a week and Sufi expects to start the project one or two months after the official paperwork is done.

The company is planning to introduce four 500-tonne capacity cold storages in Rangpur, Jessore, Munshiganj and Savar in the first phase and also aims to introduce those all over Bangladesh, even in Hatia island where it can be used to store dried fishes.

The World Bank will provide 50 per cent subsidy to the poor farmers who will buy the micro cold storages directly. Thirty per cent of the money will be given as loan at six per cent interest rates, which has to be paid back within six years. The rest 20 per cent, which is around Tk 3-4 lakh, has to be paid at the beginning.

Sufi said there are many farmers who can afford to pay the first down payment. “There are plenty of people who live abroad and upon coming back to Bangladesh invest their hard-earned money in risky ventures without thinking it through.

“They can invest their money to buy this cold storage and store their produces. Also, they can rent out space in such solar-run storage to the farmers who want to store their produces,” he said.

The micro solar cold storages can be used all year round unlike the traditional ones, which are only operational 8-9 months and used as one-time solution.

Sufi said: “If someone keeps a sack of potato for a whole season he can get Tk 300 as rent; whereas using micro solar cold storage you can store dry chillies, which are becoming increasingly popular as a all-year-round produce, and get Tk 500.”

The power consumption to store dry chillies is almost one third of potato and it is more profitable to store them than potato, he added. In these multi-purpose cold storages farmers can also opt for storing imported vegetables and hybrid seeds, and they can store four different types of produce at the same time.

“We have done the practical research and feasibility study and it is obviously much more profitable than the traditional potato cold storages,” Sufi said. A farmer can get back his investments within three to four years, he pointed out.

Unlike typical cold storages, which sprang up all around Bangladesh, solar cold storages are significantly energy-efficient and have modern designs.

“The existing structures of the cold storages are at least a hundred years old. You will not see this technology anywhere in the world nowadays,” said the BCTCL boss.

The ammonia-based traditional cold storages are only suitable for potatoes only, as other produces are affected by the leaked ammonia inside the storage.

Sufi said there is a need to get out of the trend of building potato cold storages, and put attention towards other agro-products such as tomato and chilli.

“The climate of this country makes vegetables and other produces quickly perishable. You either have to eat them or sell them at low prices within two days,” he said.

Sufi believes now it is the time to build the infrastructure to save the farmers and ensure fair prices for their products.

“The farmers won’t be able to hold on to their produces if they don’t have storages of their own. We are introducing the technology keeping this in mind,” he said.

Muhith vows to stamp out North Bengal energy woes

Posted in Bangladesh, Business, Dhaka, Economy, Energy and power by Sherpa Hossainy on May 18, 2011

Published in The Independent on May 18, 2011

Read this on The Independent website

Digital print edition

The impoverished northern region of Bangladesh will be brought under gas-connection network urgently in a bid to eliminate its existing regional inequity, said Finance Minister AMA Muhith Tuesday.

“We have not been able to use the available energy sources in the North Bengal nor have we been able to deliver adequate energy there,” Muhith said. He was speaking at a seminar on “North Bengal’s development and budget” organised by the North Bengal Development Forum (NBDF) at Hotel Ruposhi Bangla in Dhaka.

He said the most important issue on focus about North Bengal is ensuring gas supply there. He blamed Petrobangla for its failure to provide enough gas supply for the region.

“It is unacceptable that Petrobangla has not been able to add significant gas supply to the North Bengal in two and a half years,” Muhith lamented.

Speakers at the seminar said there is a coal reserve of 3 billion tonnes in four coal mines of North Bengal that could be used for producing 10,000 mega watts of electricity over the next 50 years. But they said a group of environment activists is trying to daunt the region’s progress by misguiding people about the effects of coal mining.

The minister said, “The complaints and criticisms on coal mining are only theoretical.

The practical benefit is much greater if we can mitigate the environmental and social problems arising from mining.”

Coals are mined all around the world such as in Australia and the USA, but the effects are contained so far as possible, he said. “No one sits on such a huge energy source, while, most importantly, Bangladesh’s coal quality is very good.”

He said the decision to start coal mining, whether by open-pit or underground mining method, depends on the people of North Bengal.

Muhith assured there would be no obstruction from the government if people want coal mines. “The electricity generated by furnace oil fuelled power plants is very costly and unsustainable.

There is no way but to use the huge coal resource.” “But it will take time, and it could be seven to ten years, to be practical,” the finance minister said.

M Asaduzzaman, research director of Bangladesh Institute of Development Studies (BIDS), said: “There can be no provision of ‘no’ in the case of coal mining. The issues are only technical.”

Although Muhith rejected the idea of starting coal mining by Underground Coal Gasification (UCG) method saying the technology is still not viable.

The finance minister also snubbed the idea of a federal government in the northern region saying the integrated economy of the country does not allow such system. But he proposed a district-based government system, as there are 20 lakh people on an average in a district, which is bigger than the population of many countries like Sri Lanka and Bhutan.

He said the Prime Minister Sheikh Hasina also expressed her interest in forming such government. Muhith also said providing loans without interest is impossible but subsidies and lower interest rates for the loans for the development of the Northern region could be arranged.

The minister assured that the government will focus on the development of the silk farming (sericulture), warehousing and cold storage facilities.

Md Shahriar Alam, member of the parliament, presented the seminar’s proposals. Some of them were: building warehouses, surface water irrigation project, development of tourism in the Northern region, resuming operation in the airports in the North Bengal.

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