myanmar - implementing power projects

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Key Legislation: • State-Owned Economic Enterprises Law, 1989 • Electricity Law, 2014

– Awaiting Implementing Rules from Ministry of Electric Power

• Foreign Investment Law, 2012 (FIL), its rules and notifications: – FIL rules as promulgated by the Ministry of National

Planning and Economic Development, January 2013 – Myanmar Investment Commission Notification No.

49/2014 2

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Key Legislation continued:

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• Labour Reform – Implementing Minimum Wage • Presidential Directive No. 1/2013

– Regulations to be abided by when issuing Tenders for Investment and economic activities

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Key Legislation continued:

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• Environmental Conservation Law, 2012 – Implementing Rules, 2014 – Empowers Ministry of Conservation and Forestry to

determine (i) liability owed due to environmental damage and (ii) contributions to environmental management fund.

• Environmental Social Impact Assessment is required (ESIA) for submittal to the Myanmar Investment Commission

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Ministry of Electric Power

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Yangon City Electricity

Supply Board

Distribution Transmission Generation

Generation

System Operator

Department of Hydropower

Implementation

Hydropower Generation Enterprise

Department of Hydropower

Planning

Department of Electric Power

Myanma Electric Power

Enterprise (MEPE)

Electricity Supply

Enterprise

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Union Government involvement

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• Union Cabinet • Office of the Attorney General (OAG) • Ministry of Electric Power (MOEP) • Department of Electric Power (DEP) • Ministry of National Planning and Economic

Development (MNPED) • Myanmar Investment Commission (MIC) • Directorate of Investment and Company

Administration (DICA)

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Process for IPPs

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Investment climate: Foreign energy companies are allowed to act as

Independent Power Producers (IPP) in Myanmar

Land concessions for natural gas turbine, hydro, solar waste-fired and wind are possible

Union Government's main objectives is to promote electricity production from new and renewable sources of energy

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Experience counts: • Myingyan IPP BOT project

• Tendered Project

• Duane Morris advising the Singapore consortium awarded the project

• Complex transaction – 80% debt financed by the likes of IFC and ADB to name a few

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Experience counts: • Solar power project by Thai Conglomerate

• New Yangon Partner, has previously given transactional assistance regarding the IPP process

• Corporatization of YESB

• New Yangon Partner, has previously given assistance in the corporatization process and structuring for potential foreign investment

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What we can share… • Tariffs

• What is the basis for negotiation?

• What are considered acceptable rates of return on project investments?

• Security Package / Project Financing • Is it able to be lawfully provided to financial

institutions to secure debt financing?

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What we can share… • Uncertainties concerning the Union Government

• MEPE and its ability to purchase power

• What protections will be made from payment defaults on the part of the government counterparty in the PPA?

• Union Government guaranties (stand-by letter of credit) is a non-starter for discussion.

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Recommendations • Local Partner – may help or be hindrance

• Not legally required

• Due Diligence suggested

• Engage Experienced Professional Advisers • IPP process is complicated and time consuming

• Deal with experienced advisers to help navigate through the process

• Remain Patient – very slow pace in Myanmar

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Thank you very much!

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Contact email:

[email protected]

DUANE MORRIS & SELVAM MYANMAR

mailto:[email protected]