ICBC Yangon Branch contributes to $9 million lending arrangement for 135MW Kyauk Phyu Combined Cycle Power Plant Construction Project (Linked to Record ID#88703 and #64147)

Project narrative

On March 27, 2019, Kyauk Phyu Electric Power Company Limited (KPEPC) — a special purpose vehicle and joint venture of Power China Resources Limited (75% equity stake) and Myanmar Supreme Trading Company Limited (25% equity stake) — was legally incorporated in Myanmar. Then, in July 2019, Myanmar’s Electric Power Generation Enterprise (EPGE), a state-owned energy company, invited tenders for the 135MW Kyauk Phyu Combined Cycle Power Plant Construction Project to be implemented on a build-operate-own (BOO) basis. On November 5, 2019, a power purchase agreement (PPA) was signed by EPGE, Myanmar’s Ministry of Electricity and Energy (MOEE) and KPEPC. A land lease agreement was signed on September 11, 2020. Then, in March 2021, KPEPC secured approval from the Foreign Exchange Management Department of the Central Bank of Myanmar to receive overseas financing for the implementation of the 135 MW Kyauk Phyu Combined Cycle Power Plant Construction Project. On May 27, 2021, KPEPC and the Government of Myanmar’s MOEE signed a 25-year concession agreement. The total estimated cost of the independent power project was $180 million and it was financed according to a debt-to-equity ratio of 70-30. China Development Bank (CDB) is identified by an official source as the project’s source of debt financing. CDB reportedly issued an insured loan with an interest rate of 6-7% (captured via Record ID#64147). The proceeds of the loan were to be use by the borrower to partially finance a commercial contract between KPEPC and Power China Resources Limited, which was signed on December 10, 2020. Then, in 2022, ICBC Yangon Branch cooperated with a local bank in Myanmar to issue loans worth $9 million to KPEPC (captured via Record ID#102824). ICBC Yangon Branch also provided $10.81 million in foreign exchange settlement for the construction and operation enterprise of the project, with a settlement amount of $28.45 million in the same year. The purpose of the project was to build a 135 MW combined cycle power plant near the Kyauk Phyu 230KV main substation in Kyauk Phyu Township, Kyauk Phyu District, and Rakhine State. Power China Resources Limited was the EPC contractor responsible for the implementation of the project. Implementation commenced on February 5, 2021. Then, on March 20, 2022, the centralized control system (DCS) system received electricity successfully, marking the official entry of the Kyaukpyu gas-fired power plant project into the commissioning and trial operation stage. On June 24, 2022, the EDI system in the power plant produced desalinated water. Then, on October 11, 2022, an official handover ceremony was held for the power plant. The power plant was connected to the national grid on December 7, 2022. The project was originally scheduled to reach completion on November 30, 2022.