[Suspended] China Development Bank contributes to loan syndicate for 6000MW Myitsone Hydropower Plant Construction Project

In December 2006, State Power Investment Corporation (SPIC) signed a memorandum of cooperation with Myanmar’s Ministry of Electric Power (MoEE) No. 1 to develop 2 hydropower plant projects, one of which was the 6000MW Myitsone Hydropower Plant Construction Project. Then, on February 20, 2010, a joint venture called the Upstream Ayeyawady Confluence Basin Hydropower (UACBH) Company was created by MoEE (15% ownership stake), SPIC (80% ownership stake), and Asia World Company (5% ownership stake) to manage the design, financing, and implementation of the 6000MW Myitsone Hydropower Plant Construction Project. In early 2011, an RMB-denominated syndicated loan was issued (mostly likely to UACBH) for the 6000MW Myitsone Hydropower Plant Construction Project. China Development Bank (CDB) contributed to the loan, but the size of its contribution is unknown. The borrowing terms of the loan are also unknown. However, it is known that as a source of collateral (security), the Government of Myanmar pledged its shares in the the joint venture. Future revenues (electricity sales) from the power plant were expected to be use to facilitate loan repayment. The purpose of the project was to construct a 6000MW hydroelectric power plant and dam at the confluence of the Mali and N’mai rivers and the source of the Irawaddy River (Ayeyawady River). The dam site is 3.2 kilometres (2.0 mi) below the confluence of the Mali River and the N'Mai River about 42 km (26 mi) north of Myitkyina, the capital of Kachin State, in northern Burma. The source of both the N'mai and Mali Rivers is the Himalaya glaciers of northern Burma in the vicinity of 28° N. The easternmost of the two, N'mai river, is the larger stream and rises in the Languela Glacier north of Putao. It is not navigable due to its strong current, whereas the smaller western river, the Mali, is navigable, despite a few rapids. The project's proposed 140 meter high dam would create a large reservoir inundating 397 km2 and storing 13,190 hm3 . Power generation at this site would benefit from the large upstream storage projects proposed by SPIC. Ten percent of power generation would be provided to Myanmar free (about 2,940 GWh or 27% of consumption in 2014). Although 90% of the power generated would be earmarked for export (primarily to Yunnan Province in China), Myanmar would have an option to purchase additional power from the project. Also, according to the UACBH website, water flows in the Ayeyarwady River downstream of the dam would increase 16% in the dry season and reduce by 3.5% during the flooding season. Construction of preliminary works reportedly commenced on February 20, 2010. An Environmental Impact Assessment (EIA) was submitted to Myanmar’s Ministry of Natural Resources and Environmental Conservation (MONREC) on June 1, 2011. Then, on September 30, 2011, amid democratic reforms in the country, President Thein Sein announced that the project would be suspended. Given that the Government of Myanmar’s seemed to take public opinion into account when it took this decision, the suspension was seen as a reversal of the authoritarian rule. The dam project had proven controversial in Myanmar due to its enormous flooded area, its expected environmental impacts, its location 60 miles from the Sagaing fault line. The Burmese people also regard the Irrawaddy River as the birthplace of Burmese civilization. and although access to the Chinese market guarantees the dam's electricity sales, for many Burmese people the project came to represent undue Chinese influence in Myanmar. Prior to project suspension, resettlement at dam site was reportedly finished and works such as site formation, water supply, power supply and transportation facilities had commenced. The project has not resumed. Former President of Myanmar, Thein Sein, announced that the dam would not resume construction during his term, which ended in March 2016. As of July 2018, the project was still indefinitely suspended, though China expressed interest in resuming the project. The Chinese project title is 密松水电站. The Burmese project title is မြစ်ဆုံ တာတမံ. 　　

Additional details

After fifty years of operation, UACBH was to become 100% Myanmar-owned.

Number of official sources

10

Number of total sources

37