YMEC provides $160 million supplier credit for 280MW Paungluang Hydropower Plant Construction Project (Linked to Record ID#63813)

Project narrative

In October 1998, Yunnan Machinery and Equipment Import and Export Corporation (YMEC) signed the first contract for the Paunglaung Hydroelectric Power Project, which called for YMEC to provide the complete set of machinery and equipment, design underground factory and direct work implementation. The first contract was worth 160 million USD, and was to be financed by an export credit with a 2.75% interest rate, and payable over 10 years. The second contract was signed in November 1998 between YMEC and Myanmar Electric Power Enterprise (MEPE) stated that YMEC was to provide machinery and equipment and spare parts for construction of the underground factory. The second contract was worth 10 million USD and was to be supported by an export seller's credit, with a maturity of 7 years, grace period of 2 years, and interest rate of 5%. Based on a news release from China’s Ministry of Commerce, the project was approved by the State Council of China in August 1998. On September 18, 2000, China Eximbank and Yunnan Machinery and Equipment Import and Export Corporation (YMEC) signed an RMB 1 billion export seller's credit agreement for the 280MW Paungluang Hydropower Plant Construction Project. YMEC, in turn, used the proceeds from the export seller's credit to finance two separate supplier credit agreements that it previously signed with Myanmar Electric Power Enterprise (MEPE): a $160 million supplier credit agreement in October 1998 that carried a 2.75% interest rate and a 10 year maturity (captured in this project), and a $10 million supplier credit agreement in August 1998 that carried a maturity of 7 years, grace period of 2 years, and an interest rate of 5% (captured in Record ID#63813). YMEC also received credit insurance from Sinosure. The purpose of the project was to construct a 280MW hydroelectric power plant — with four, 70MW power generation units (Unit 1, Unit 2, Unit 3, and Unit 4) — on the Paungluang River in Pyinmana within Zeyarthiri Township (exact locational coordinates: 19.786444, 96.335833). The project site is located about 20 km east of Nay Pyi Taw and has the highest dam in the sub-basin (131 meters). It includes an underground power plant close to the toe of the spillway. The reservoir inundates 15 km2 and stores 678 hm3. It is a multipurpose dam, which primary purpose is hydroelectric power generation, but also serves irrigated agriculture by providing water to an irrigation weir about 14 km downstream. A 13 km double circuit 230 kV connects the power plant to the Pyinmana substation. Yunnan Machinery and Equipment Import and Export Corporation (YMEC) and Sinohydro Corporation Ltd. were the contractors responsible for implementation, and the project is owned by the Ministry of Electricity and Energy of Myanmar. The project commenced in October 1998 and it was completed on March 25, 2005.