China Eximbank provides export seller's credit to YMEC for 140MW Upper Paunglaung Hydroelectric Power Plant Construction Project
Constant 2017 USD
Funding agency [Type]
Export-Import Bank of China [State-owned Policy Bank]
Energy (Code: 230)
Supplier's Credit/Export Seller's Credit
In 2002, Hydroelectric Power Department (HPD) of Myanmar’s Ministry of Electric Power and Kansai Co of Japan conducted a preliminary survey report for the 140MW Upper Paunglaung Hydroelectric Power Plant Construction Project. Then, in 2004, the Switzerland-based Colenco Power Engineering Ltd completed a project feasibility study. On June 3, 2005, HPD and Yunnan Machinery and Equipment Import and Export Corporation (YMEC) signed an MOU regarding the 140MW Upper Paunglaung Hydroelectric Power Plant Construction Project. Then, on February 14, 2006, HPD and YMEC signed an $80 million commercial contract for the project. YMEC also reported provided a supplier credit to HPD to support the implementation of the project, and YMEC in turn financed the supplier credit by securing an export seller’s credit from China Eximbank (See: p. 35 of 'Attracting Investors in Hydropower: What’s Needed -- Lessons from Laos'; 'Upper Paunglaung Dam, Shan State, Myanmar'; and p. 115 of 'ASEAN Investment Report 2015').The purpose of the project was to construct a 140MW hydroelectric power plant — with two, 70MW power generation units (Unit 1 and Unit 2) — on Paunglaung Creek. The project site is located 26 miles east of Pyinmana in Mandalay Division (exact locational coordinates: 19.756000, 96.598000) and 24 km upstream from the Paunglaung Dam (captured via Project ID#63813). The project involved the construction of a 98 meter high RCC dam and a reservoir that stores 1,286 hm3 and extending 50 km. The reservoir was designed to allow the river to be regulated and thereby improve power generation at Lower Paung Laung and increase the irrigation potential further downstream. An above ground power plant is connected to the Lower Paung Laung switchyard via the Nancho hydropower plant by a 27 km long (to Nancho) 230 kV transmission line. Construction began in 2006 and a test run of the spillway was conducted in 2008. The rotor of Unit 1 was hoisted into place on December 2, 2013. The rotor of Unit 2 was hoisted into place on February 22, 2014. A project completion ceremony took place on December 9, 2015. The power plant connected to the national grid on or around December 24, 2015. This project was plagued by controversy. One report from the civil society group Kayan Women’s Union alleged that the project supported involved forced labor and forced displacement. Another report from Physicians for Human Rights (PHR), Land in Our Hands, and Kayan New Generation Youth documented various human rights violations. The Myanmar Times found that more than 10,000 people from 23 villages were evicted after April 2013 to make place for the large dam. Among the affected groups were ethnic Kayan Lahta, Shan, Burman, and Pa-O. Most were moved to a relocation site near the Lein Li bridge, close to the middle of the reservoir. Residents were not well informed about the displacement process. They first learned about the project when officials came to place markers in their village to assess the water line for the reservoir, some villagers said. Many residents only realized that they would be displaced once construction work had started. While the government assisted the relocation through the provision of new housing infrastructure and farmland, villagers and civil society groups were deeply concerned about related livelihood losses, provoked by the drowning of traditionally used farming, fishing and forest areas. The relocation sites were hilly and lacked enough fertile plain to offer sufficient land to everybody. Compensation procedures were reported as irregular, corrupt and not transparent. In several cases, the payments were insufficient to cover the costs imposed by the relocation on the villagers. This project is also known as the Paunglaung (II) Hydropower Project and the 2x70MW Paunglaung Hydropower Project Phase II. The Chinese project title is 缅甸上邦朗水电站 or 我公司承建的缅甸邦朗二期水电站（上邦朗水电站项目.
The face value of the export seller’s credit is unknown. However, given that China Eximbank has a policy of using export credits to finance up to 85% of the cost of a commercial contract, AidData assumes for the time being that the face value of the export seller’s credit was equivalent to 85% of $80 million. The China Eximbank export seller’s credit that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.
Number of official sources
Number of unofficial sources
Receiving agencies [Type]
Myanmar Ministry of Electric Power [Government Agency]; Yunnan Machinery and Equipment Import and Export Co., Ltd. (YMIEC) [State-owned Company]
Implementing agencies [Type]
Yunnan Machinery and Equipment Import and Export Co., Ltd. (YMIEC) [State-owned Company]