Solar Investment Opportunities: Myanmar

Myanmar: Solar Investment Opportunities
Emerging Markets Task Force Report

Chair of the SolarPower Europe Emerging Markets Task Force: Stefano Mantellassi, Eni SpA.
Authors: ABO Wind AG (Alden Lee, Anna Aleksanova).
Coordinator of the SolarPower Europe Emerging Markets Task Force: Máté Heisz, SolarPower Europe.
Contact: info@solarpowereurope.org.
Acknowledgements: SolarPower Europe would like to extend a special thanks to ABO WIND AG and all Task Force members that contributed with their knowledge
and experience to this report. This would never have been possible without their continuous support.
Project information: The SolarPower Europe Emerging Markets Task Force was launched in March 2018 and, since then, has become an active working group of
nearly 100 experts from almost 50 companies. The objective of the Task Force is to identify business and cooperation opportunities and thereby contribute to the
energy transition in emerging markets outside Europe.
Design: Onehemisphere, Sweden.
Published: May 2019.
Disclaimer: This report has been prepared by SolarPower Europe. It is being furnished to the recipients for general information only. Nothing in it should be
interpreted as an offer or recommendation of any products, services or financial products. This report does not constitute technical, investment, legal, tax or any
other advice. Recipients should consult with their own technical, financial, legal, tax or other advisors as needed. This report is based on sources believed to be
accurate. However, SolarPower Europe does not warrant the accuracy or completeness of any information contained in this report. SolarPower Europe assumes no
obligation to update any information contained herein. SolarPower Europe will not be held liable for any direct or indirect damage incurred by the use of the
information provided and will not provide any indemnities.

SolarPower Europe / MYANMAR: SOLAR INVESTMENT OPPORTUNITIES - EMERGING MARKETS TASK FORCE REPORT / 3
TABLE OF CONTENTS
FOREWORD 5
CONTEXT 7
MYANMAR ELECTRICITY MARKET 14
RECOMMENDATIONS 20
REFERENCES 22
“This report series, developed by our Emerging Markets Task Force,
provides quality market information to solar investors looking for
opportunities around the world. It will help solar companies to
better access new markets, and thus ultimately, accelerate the
global energy transition.”
Walburga Hemetsberger
CEO, SolarPower Europe

4 / SolarPower Europe / MYANMAR: SOLAR INVESTMENT OPPORTUNITIES - EMERGING MARKETS TASK FORCE REPORT
Clean Energy Associates
Sponsor Members:
SolarPower Europe would like to thank the members of its
Emerging Markets Task Force that contributed to this report including:

FOREWORD
BY STEFANO MANTELLASSI, Vice-President Energy Solutions ENI SpA and Chair of the
SolarPower Europe Emerging Markets Task Force, and ALDEN LEE, Head of International
Solar Department, ABO Wind AG.
In March 2018, Solar Power Europe launched the Emerging Markets Task Force to identify business and
cooperation opportunities and thereby contribute to the energy transition in emerging markets outside Europe.
Since then, the Task Force has become an active working group of nearly 100 experts from almost 50 companies,
working on a suite of market reports and investigating available financing instruments for solar project
development in emerging markets.
The task force has operated through a series of physical and virtual meetings, visits in the selected markets and
conferences. We have also engaged in productive discussions with other relevant initiatives such as the Africa-EU
Renewable Energy Cooperation Programme (RECP), GET.invest and the IRENA Coalition for Action’s Business and
Investors Group. After a year of intense work, we are proud to present the Task Force’s first report on a Southeast
Asian country, Myanmar.
This report developed by ABO Wind AG, with the support of the Task Force, provides an overview of investment
opportunities for solar deployment in Myanmar. It offers a snapshot of the country’s business environment and an
overview of the major demographic and macroeconomic trends. It also addresses issues related to the country’s
credit and political risk. The report focuses on the energy context, relevant actors and the regulatory framework
for investments in renewables. The research finds that Myanmar has an incredible potential for solar energy, but
the government still has a lot of work to do to unleash the potential and to attract foreign direct investments into
Myanmar´s solar industry. Rising electricity demand, rapid demographic growth and strong neighbour solar
countries like China, India, and Thailand give Myanmar great opportunities to increase the installed solar capacity.
WiththesupportandexcellentcontributionofotherTaskForcemembers,wehavepublishedadditionalreportsonIvory
Coast, Mozambique and Senegal. In 2019, we are working on market reports on India, Kazakhstan, Morocco, Tanzania
and Tunisia, and technical reports on digital solar and quality assurance in emerging markets.
If you want to be part of this initiative and discover new business opportunities, join SolarPower Europe's Emerging
Markets Task Force.
STEFANO MANTELLASSI
Vice-President Energy Solutions,
ENI SpA.
Chair of the SolarPower Europe
Emerging Markets Task Force.
ALDEN LEE
Head of International Solar
Department, ABO Wind AG.

SOURCE: World Bank, 2017 Solargis.
GLOBAL HORIZONTAL
IRRADIATION
MYANMAR

1. CONTEXT
WORK STREAM
MYANMAR
OFFICIAL LANGUAGE
CAPITAL
LARGEST CITY
CURRENCY
SURFACE
POPULATION (2017)
URBAN POPULATION (% TOTAL POPULATION)(2017)
UNEMPLOYMENT RATE (2017)
GDP PER CAPITA (CONSTANT 2010 US$)
GDP GROWTH (2017)
GDP GROWTH SOUTHEAST ASIA (2017)
HUMAN DEVELOPMENT INDEX (HDI)
(PERMITTED) INVESTMENTS IN POWER SECTOR IN 2018 (%)
PEOPLE USING AT LEAST BASIC DRINKING WATER SERVICES (%)
Burmese (Myanmar)
Naypyidaw
Yangon
Kyat (MMK)
676,578 km2
53.4 million
29.5%
2.2%
1,484.20 US$
5.7%
5.3%
0.578 (medium)
27.6%
67.5%
SOURCE: IMF, ADB, etc. All data given for year 2017, if not mentioned otherwise.
ENERGY GEOGRAPHY
Myanmar is one the most poorly electrified countries in
Southeast Asia, with an average electrification rate of
only 39% at the end of 2017. Yangon, its largest city and
the former capital, consumes almost half of the country’s
electricity supply. Myanmar has tremendous solar
resources and vast hydro potential. The International
Growth Centre (Energy in Myanmar, 2016) estimates the
country’s solar potential to be 51.973 TWh per year. The
Asian Development Bank assesses the opportunity for
solar in Myanmar up to 27 GWp. The average yearly total
of PV power production varies between 1,150 kWh/kWp
and 1,600 kWh/kWp with high values in the central
region. In the mountains, the power production is lower
by up to 20% (or even more, due to terrain shading).
According to other research, conducted by ESMAP (Suri, et
al., 2017), Myanmar has very good potential for
development of solar power, especially in the lowlands of
thecentralpartofthecountry,wheredemandisthehighest.
One of the most disaster-prone countries in the world
Myanmar is one of the most vulnerable to natural
disasters countries in the world. The country ranks 14th
out of 191 countries in INFORM 2019 Risk Index (INFORM
Index for Risk Management, 2019); it is highly exposed
to floods, earthquakes and tsunamis.
According to the Germanwatch Global Climate Risk
Index (Germanwatch, 2019), Myanmar was one of the
countries most affected by extreme weather events
between 1997 and 2016. Therefore, Myanmar would
benefit from decentralized power generation like solar.
DEMOGRAPHICS
Myanmar’s population is relatively young – according to
the 2014 Census, half of the population is under 30 years
old. However, life expectancy at birth is rising and
reached 66 years in 2016.
Despite significant progress made in poverty reduction
(the poverty rates decreased by 33% between
2004/2005 and 2015 from 48.1% to 32.1%, IMF), the
disparities between urban and rural areas remain very
stark (14.5% compared to 38.8% in 2015, IMF). Around
half of the population continues to live under the near-
poor line (IMF Country Report No. 18/91, 2018).
Myanmar´s HDI values have increased constantly during
the last decades so that Myanmar has entered the
“medium” group in the year 2016, ranking now 148th
out
of 189 countries.

MACROECONOMIC CONTEXT
Myanmar is one of the fastest growing countries in
Southeast Asia: as projected by the International
Monetary Fund, the country’s GDP growth for 2018-2019
is expected to be in the range of 6.9%-7.0% (IMF, 2018).
Myanmar is working on a series of economic reforms,
one of them being the implementation of the Myanmar
Sustainable Development Plan.
As projected by Coface, Myanmar’s economy growth will
continue to be one of the most dynamic in the region.
The agricultural sector which accounts for nearly a third
of the GDP is benefiting from public investments,
although the productivity remains quite low. Growth is
also stimulated by Chinese investments in
infrastructure.1
Economic growth will also persist thanks
to the manufacturing sector (textile, automotive,
machinery and electronics) and external demand.
1 CONTEXT / CONTINUED
FIGURE 1 COMPARISON: EDUCATION MYANMAR VS. THAILAND
0
0.2
0.4
0.6
0.8
EducationIndex
1980 1985 1990 1995 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013
Thailand
Myanmar
SOURCE: United Nations Development Programme, Human Development Reports.
FIGURE 2 REAL GDP GROWTH (2000-2022)
0
4
8
12
16
%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022
Emerging and Developing Asia
Southeast Asia
Myanmar
SOURCE: The International Monetary Fund.
1 In September 2018 the Government of Myanmar signed a memorandum of
understanding with China on the construction of the China-Myanmar
Economic Corridor. The countries are intending to collaborate in many
sectors: from infrastructure, construction and manufacturing to agriculture,
transport, telecommunications, as well as research and technology.

The manufacturing sector in particular has a growing
demandforlow-costelectricity,whichsolarcouldprovide.
Because of its strategic geographical location, Myanmar
is benefiting from proximity to China, Thailand, India
and other fast-growing countries in ASEAN. Half of the
trade is with China, while India is the third largest
neighboring trade partner and one of the main investors
in Myanmar. The countries are working on improving air,
sea and road connectivity and boosting trade.
Thailand is also a major trade and investment partner
of Myanmar. Thailand is developing its Eastern
European Corridor (EEC), in order to improve
connectivity with other ASEAN countries, including
Thailand’s eastern seaboard to Myanmar’s Dawei deep-
sea port project. Around 75% of domestic gas
production is exported to China and Thailand. Gas
exports account for the majority of Myanmar’s GDP.
Strong exports reduced trade and current account
deficits in 2017/2018 (World Bank Group, 2018).
After a period of relative currency stability in 2017,
Myanmar experienced rapid depreciation of Kyat
against major currencies, such as the US dollar and
Yuan, driven by increased prices on imported goods
(including fuel) and rising public salaries. The inflation
rate also peaked, exceeding 8% in October 2018.
Recognizing that further development of monetary and
fiscal policies is required in the country, the IMF in its
2023 projections expects the inflation rates to remain
relatively stable.
As instructed by the Central Bank of Myanmar (CBM),
state and regional government as well as private
businesses are to undertake local transactions in
Myanmar Kyat. Since the high volatility and low
convertibility of Kyat, investors are facing significant
exchange rate risks. According to MHM Yangon, the
hedging opportunities for currency risks in the country
are quite limited.
The results of the latest World Bank survey of economic
conditions in Myanmar, conducted in February-March
2018, points out that businesses in the country are in
general optimistic about the future, referring to
improved availability of credit, growing employment,
public consumption and private investments (World
Bank Group, 2018).
Myanmar has double tax treaties with India, Laos,
Singapore, South Korea, Thailand, the United Kingdom,
and Vietnam. Consequently, many investments are are
flowing to the country via Singapore, which would also
be a convenient hub for foreign solar investors. The
country also has economic agreements with China,
Cuba, Kuwait and Singapore and economic and trade
agreements with Australia, Cambodia, Indonesia, New
Zealand and Turkey (KPMG, 2018).
FIGURE 3 INFLATION RATE, AVERAGE CONSUMER PRICES
-10
0
10
20
30
40
50
60
70
%annualchange
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024
Southeast Asia
Myanmar
SOURCE: The International Monetary Fund.

BUSINESS ENVIRONMENT
According to the Heritage Foundation’s Index of
Economic Freedom 2018, Myanmar ranked 33rd among
43 countries in the Asia–Pacific region, and its overall
score is below the regional and world averages, which
allows to conclude that the country is economically
“mostly unfree”. The main concern is the conflicts over
land titles and poorly established property rights.
Corruption, especially among the police, is also one of
the main issues. The access to credit remains very poor,
while state-owned banks dominate the underdeveloped
financial sector. The prevalence of state-owned
enterprises is limiting foreign investment in the country.
Myanmar is also struggling with the enforcement of
contracts and protection of minority investors (The
Heritage Foundation). Since local debt financing and
international investors are vital for solar projects, this is a
ratherchallengingsituationforthegrowthoftheindustry.
Myanmar also scores rather poorly compared to other
countries in East Asia and the Pacific region in the
ranking of Doing Business (Ease of Doing Business in
Myanmar, 2018). Although the ease of doing business
significantly improved in 2015-2016 compared to
previous years, the business conditions for getting
credit, protecting minority investors and dealing with
enforcement of contracts make Myanmar one of the
most difficult countries for doing business in the world
(Ease of Doing Business in Myanmar).
FIGURE 4 ECONOMIC FREEDOM SCORE
0 100
53.9 (up 1.4 points)
61.1: World average
NOTABLE SUCCESSES: TRADE FREEDOM AND GOVERNMENT SIZE
CONCERNS: RULE OF LAW, INVESTMENT FREEDOM, AND FINANCIAL FREEDOM
OVERALL SCORE CHANGE SINCE 2014: +7.4
61.0: Regional average (Asia-Pacific region)
50 60 70 80
SOURCE: The Heritage Foundation (2019).
FIGURE 5 DOING BUSINESS EAST ASIA & PACIFIC, RANK (2018)
Myanmar
Lao PDR
India
Indonesia
Malaysia
0 20 40 60 80 100 120 140 160 180
Rank
SOURCE: Doing Business, The World Bank Group (2018).

Project financing
There is no established practice for project financing in
Myanmar so far. Most of the project finance is realized
by international development banks and institutions,
such as the International Finance Corporation (IFC), the
World Bank, and the Asian Development Bank (ADB).
KfW, the German development bank, is also realizing
projects in the framework of the Rural Electrification
Programme. According to the Myanmar Legal Services
Limited, the local banking sector has very limited capital
to provide financial services required to support project
financing in the country.
ADB participated in the development of Myanmar
Companies Law, enacted in December 2017, while IFC
supported the implementation of Myanmar Investment
Law, which came into force in October 2016. Both
organizations also helped the Ministry of Electricity and
Energy(MOEE)todraftthefirstPPAagreementforaCCGT
power plant, located in Myingyan. This was the first
project awarded by a competitive bidding procedure.
As reported by the MHM Yangon, “any investment that is
strategically important, capital intensive, uses state-
owned land, or may have a large impact on the
environment or local community, requires permission
from the Myanmar Investment Commission (MIC) -
(ProjectFinanceReport2018-Myanmar,2018).”Aforeign
company also requires the MIC permit in order to obtain
land rights authorization for the initial term of 50 years
with two 10-year extensions. Power projects that are
bigger than 30 MW, additionally require MOEE approval.
Banking sector
From 1963 to 1990 Myanmar’s banking system was
completely state-owned. However, according to the
International Monetary Fund, private banks now
account for more than half of banking system assets. In
2003, Myanmar suffered a severe banking crisis that was
triggered by the collapse of ‘informal finance
companies’ that offered high rates of return, while
engaging in highly speculative investments (IMF Country
Report No. 18/91, 2018). Confidence in the financial
system was weakened by large-scale deposit
withdrawals, despite the preventive measures of the
Central Bank of Myanmar. Lack of access to deposits
made it difficult for companies to make payments to
suppliers and employees. It took almost a decade for
the banking system to recover and it still remains fragile.
Nevertheless, the sector began to open up in 2015/2016
when the first branches of foreign banks were granted
banking licenses. In December 2017, foreign banks were
permitted to provide export financing to local
corporations. The Central Bank of Myanmar is planning
to grant more banking licenses in 2019. As of today,
there are four state-run banks, 24 private banks and 13
foreign banks active in Myanmar.
The private sector’s credit share of the GDP is currently
around 25%. 95% of private sector lending is to large
enterprises, while households and SMEs rely on credits
from non-bank and informal lenders at higher interest
rates (IMF Country Report No. 18/91, 2018).
FIGURE 6 RANKINGS ON DOING BUSINESS (2018), BY TOPIC
0
50
100
150
200
Rank
Starting a
business
Dealing with
construction
permits
Getting
electricty
Registering
property
Getting
credit
Protecting
minority
investors
Paying
taxes
Trading
across
borders
Enforcing
contracts
Resolving
insolvency
SOURCE: Doing Business, the World Bank Group.

Legislation and regulatory framework
The Myanmar Companies Law (MCL) was enacted on
December 6, 2017 by the Directorate of Investment and
Company Administration (DICA), and entered into force in
August 2018. The law stipulates the provisions on
registration and incorporation of companies (including
overseas corporations) in Myanmar. MCL allows for up to
35% of foreign shareholding in companies classified as
Myanmar companies (Project Finance Report 2018 -
Myanmar, 2018).
Thereisnospecificlegalframeworkforrenewableenergy
investments. The development of medium and small
power projects (of capacity lower than 30 MW), that are
notconnectedtothenationalelectricitygrid,requiresthe
permission of state and regional governments.
Tax exemptions can be granted to the company by the
Myanmar Investment Commission for periods of three,
fiveorsevenyears,dependingontheplaceofinvestment.
The Economist Intelligence Unit also points out low
government effectiveness and high legal/regulatory, as
well as infrastructure risks.
Special Economic Zones (SEZ)
TheMyanmarGovernmentenactedtheSpecialEconomic
Zone Law in 2014. There are currently three SEZs under
development: Kyauk Phyu in Rakhine State, Dawei in the
Thanintharyi Region and the Thilawa in Yangon Region.
AccordingtoDICA,SEZsmaybe“FreeZones”,“Promotion
Zones” and others. “Free Zones” are deemed to be
situated outside the country and subject to custom duty
and other tax exemptions, while “Promotion Zones” are
based mainly on the domestic market (DICA).
Among others, the law offers the following incentives to
investors (Myanmar Legal, 2018):
• 100% foreign ownership;
• The right to lease land for 50 years with an extension
of 25 years;
• 5-7 years income tax exemption, depending on
whether SEZ defined as a “Free Zone” or “Promotion
Zone”;
• No custom duties in “Free Zones”; relief or
exemptions on imported materials or equipment;
• Some reliefs and exemptions from value-added tax
and commercial tax;
• The right to open foreign currency accounts with
approved banks.
As reported by Myanmar Times (Myanmar Times, 2019),
Thilawa SEZ has attracted US$1.5 billion of foreign
investments to date.
POLITICAL AND SOCIAL CONTEXT
After almost five decades of military regime, Myanmar is
undergoing a period of political liberalization. The first
democratic elections with participation of all opposition
partiestookplacein2012andthenagainin2015.National
League for Democracy (NLD) leader, Aung San Suu Kyi,
became State Counselor (Coface). The next general
elections are scheduled for 2021.
The declared aim of the government to pursue inclusive
economic growth and Myanmar’s Sustainable
Development Targets, however, is affected by the
military conflict with the Rohingya minority in Rakhine
State. There are more than 135 distinct ethnic groups
living in Myanmar. According to the 2014 Census, almost
88% of the population was identifying as Buddhist. The
Rohingya people were historically denied citizenship
status and regarded as illegal immigrants. Since August
2017, more than 700,000 Rohingya have fled the
country, mostly to Bangladesh. The humanitarian crisis
resulted in the EU member countries, the United States
and Australia implementing economic and political
sanctions on Myanmar (Coface). Many international
organizations actively involved in the country have
reconsidered their development policies there.
Myanmar therefore remains among the countries with
high political and business environment risks for
enterprises, as the military continue to dominate
politics and ethnic tensions remain unresolved (Euler
Hermes Global).

FIGURE 8 POLITICAL RISK INDICATORS (SACE)
Average political risk War and civil disturbance risk
Transfer and convertibility risk
Expropriation and breach of contract risk
Southeast Asia
Myanmar
0
20
40
60
80
SOURCE: (SACE) Data (2017) Risk Map.
FIGURE 7 RISK RATINGS
CURRENT
RATING
CURRENT
SCORE
PREVIOUS
RATING
PREVIOUS
SCORE
Overall assessment D 62 D 62
Security risk C 50 C 50
Political stability risk C 60 C 60
Government effectiveness risk E 81 E 81
Legal & regulatory risk E 83 E 83
Macroeconomic risk B 30 B 30
Foreign trade & payments risk D 61 D 61
Financial risk D 67 D 67
Tax policy risk C 44 C 44
Labour market risk D 61 D 61
Infrastructure risk D 80 D 80
NOTE: E=most risky; 100=most risky. The risk ratings model is run once a quarter. SOURCE: The Economist Intelligence Unit 2018.

COUNTRY ENERGY SECTOR SITUATION
Because of poor electricity access, especially in rural
areas of Myanmar, wood, kerosene, candles and diesel
generators are still the main sources of lighting among
the majority of the country’s population.
The government of Myanmar, with the help of the World
Bank, has developed a National Electrification Plan
(NEP, 2015) that calls for universal electricity access by
2030, or 7.2 million new connections. In accordance
with the plan enacted in November 2015, the
government expects to reach 50% electrification in
2020, 75% in 2025 and 100% in 2030. The US$ 400
million loan for the project is provided by the World
Bank, while its realization is carried out by the Ministry
of Electricity and Energy (MOEE) and the Department of
Rural Development (DRD) in the Ministry of Agriculture,
Livestock and Irrigation (MOALI). The plan aims to
facilitate both grid extension and installation of mini-
grid and solar home systems.
Myanmar’s energy mix is dominated by hydro sources
(61%, or 3,221 MW), followed by gas (36%, or 1,919 MW)
and coal (3%, or 120 MW).2
Because of a very high share
of hydropower production, which is very seasonal,
scheduled load shedding is needed, especially during
the dry season. The problem of secure power supply
remains especially acute because most of the produced
electricity is exported to Thailand and China.
The Myanmar Energy Master Plan, introduced in
December 2015 with the help of ADB, provides
projections for long-term future energy demand and
fuel supply mix up to the year 2030. The plan foresees
that by 2030 Myanmar, which is currently—thanks to
large natural gas resources—one of the main energy
suppliers in the region, will become a net importer of
energy. While the plan offers scenarios that could
reduce the country’s dependency on hydro energy
through increased production from coal, the share of
solar and wind in the total energy mix in 2030 is
expected to be very modest at around 1.2%. However,
recent plans of the Ministry of Electricity and Energy
(MOEE) to diversify the country’s power mix raise
optimism for the future of the solar sector in the country.
The ministry has introduced quite ambitious renewable
energy targets – to increase the share of renewables in
electricity production to 8% by 2021 and to 12% by
2025. The MOEE is currently working on a draft of the
new reform (Myanmar Times, 2018).
2 MYANMAR ELECTRICITY MARKET
2 May 2017 estimate, provided by the Ministry of Electricity and Energy
(Ministry of Electricity and Energy, 2017).
FIGURE 9 ELECTRICITY OUTPUT, COMPARISON
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
TotalElectricityOutput(GWh)
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2014
Vietnam
Thailand
Cambodia
Bangladesh
Myanmar
SOURCE: Sustainable Energy for All.

As reported by the Myanmar Times in June 2018, Yangon
consumes around 1.5 GW of electricity, which is half of
the country’s electricity output, and its demand is
expected to double by 2021-22 (Myanmar Times, 2018).
In order to meet the growing power demand,
investments in the amount of approximately 1 billion
Kyat will be required to develop infrastructure, including
transmission lines and substations. According to the
source, there are also plans to construct 77 66 kV
substations between 2018-19 and 2021-22. The
Government is planning to approach the Asian
Development Bank in order to upgrade several 230 kV
substations across the region.
According to the study on solar resources and solar PV
potential in Myanmar, conducted by the World Bank,
most of the population (75%-85%) lives within a 25-50
km radius of HV power lines, which overall are good
premises for developing medium- and large-scale solar
projects in the country.
3 Peak demand in 2017 was ~3000 MW.
The Japan International Cooperation Agency (JICA),
together with the Ministry of Electric Power (MOEP),
worked on the creation of the National Electricity Master
Plan in 2015. The installed capacity in the country was
projected to rise from 5 GW (2017)3
to around 15 GW by
2030. However, as reported by the MOEE in its more
recent presentation (The Role of Renewable Energy in
Myanmar’s Future Energy Mix, 2017), the plan is currently
being updated. The new estimate of power demand in
2030 is 23.6 GW, which creates a gap of almost 8 GW
necessary to be filled in order to avoid power shortages
in the future. The gap could potentially be met by the
mix of solar and wind, plus biomass energy.
ELECTRICITY INFRASTRUCTURE
Due to the poor electricity infrastructure, Myanmar is
suffering from significant power losses, especially in the
distribution system, which reached between 20.5%-25%
in 2012-2014 (The World Bank Data).
JICA has been actively supporting the development of
the national transmission grid in Myanmar, particularly
carrying out projects in Mandalay, Bago, and Naypyitaw
regions (JICA).
FIGURE 10 DEMAND FORECAST RESULTS
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
MW
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
High caseLow case
Year
1,600 1,850 2,055
2,157
2,376
2,617 2,884
3,178
3,503
3,862
4,208
4,585
4,996
5,443
5,930
6,461
7,039
7,668
8,353
9,100
2,248 2,527 2,840
3,192
3,587
4,032
4,531
5,092
5,723
6,431
7,227
8,121
9,125
10,253
11,520
12,944
14,542
3,075 MW
(23.05.2017)
SOURCE: The Ministry of Electricity and Energy, Presentation “The Role of Renewable Energy in Myanmar’s Future Energy Mix”.

2 MYANMAR ELECTRICITY MARKET / CONTINUED
KYAUKPAHTO
KALAW
AUNGTHAPYE
MONYWA
ZAWGYI-1
ZAWGYI-2
PYINOOLWIN
SEDAWGYI
LETPANHLA
MANN
CHAUK
WAZI
KYUNGCHAUNG
PAKOKKU MYINGYAN
NYAUNGBINGYI
MANDALAY
AUNGPINLE
THAPHANSEIK
BHAMO
NGATPYAWDINE
SHWEGU
KYAWSWA
MYANAUNG
SINDE
PYAY
THAYET
TAUNGDWINGYI
PYINMANA
BAGO
ZAUNGTU
SHWE DAUNG
TAUNGOO
BALUCHAUNG-2
BALUCHAUNG-1
THAZI
KINDA
MAGWAY
YWAMA
THAKETA
MAWLAMYINE
PHAAN
THATON
HLAWGA
PATHEIN
YEGYI
HINTHADA
SALE
NYAUNGOO
MYAUNGMYA
AHLONE
THAILAND
LAOS
INDIA
BANGLADESH
CHINA
NATIONAL GRID SYSTEM
MYANMAR
SOURCE: Global Energy Network Institute (GENI).
FIGURE 11 TRANSMISSION, DISTRIBUTION LINES AND SUBSTATIONS (AS OF AUGUST 2014)
VOLTAGE (kV) LENGTH (KM) SUBSTATIONS CAPACITY (MVA)
230 3,156 32 4,105
132 2,189 21 1,248
66 3,003 188 2,421
Total 8,348 241 7,774
SOURCE: Department of Hydropower Implementation Ministry of Electric Power.
LEGEND
Substation
Gas Turbine Power Station
230 kV Transmission Line
Hydro-power Station
Steam Turbine Power Station

OFF-GRID RENEWABLE ENERGY DEMONSTRATION PROJECT
MYANMAR
SOURCE: Myanmar Off-Grid Renewable Energy Demonstration Project funded by ADB (Asian Developemnt Bank).

ACTORS, TARIFFS AND REGULATORY NETWORK
The key regulatory institutions in Myanmar are the
Myanmar Investment Commission, the Directorate of
InvestmentandCompanyAdministrationandtheCentral
BankofMyanmar.Themainregulatorybodyintheenergy
sector is the Ministry of Electricity and Energy (MOEE).
Myanmar has one of the lowest electricity tariffs in the
world. The average power tariff in 2017 was $51/MWh
(69 Kyat/kWh). Residential prices in Myanmar are 35
Kyat/kWh for the first 100 units, 40 Kyat/kWh for the next
100 units, and 50 Kyat/kWh for all units after that.
According to the Myanmar Times, the average cost of
supplying 1 kWh in 2016/17 fiscal year was 96 Kyat,
which means that the government is losing between
59-74 Kyat for every unit sold to residential consumers
(Myanmar Times, 2018).
IPP projects in Myanmar could be implemented on
either joint venture (JV) or build-operate-transfer (BOT)
basis (Myanmar Legal, 2018). Regulatory approvals of
the following institutions are required in order to
develop and implement the project:
• Attorney General’s Office (AG),
• Ministry of Planning and Finance (MOPF),
• Myanmar Investment Commission (MIC).
• Ministry of National Resources and Environmental
Conservation (MONREC).
More than 30 laws govern land management, at least 20
government agencies are involved in land issues, at both
national (Union) and provincial (State) levels. MIC is
responsible for granting land to foreign investors.
NEW DEVELOPMENTS FOR SOLAR POWER
Large-scale PV-projects
According to different sources, Myanmar’s large-scale
solar pipeline is estimated to be between 470 MWp and
1.5 GWp (PV Magazine Global, 2018).
Several PPAs were concluded with the MOEE in 2016.
Among them, the 220 MWp Minbu project, with the first
50 MWp phase expected to be completed in the first
quarter 2019. Thailand-backed Green Earth Power, GEP
(Myanmar) Co. Ltd has signed a 30-year PPA with the
MOEEfor150Kyatperunit(likelymeaning~€8.6ct/kWh).
The US$275 million project is planned to be realized in
three 50 MWp phases and the last 70 MWp phase. Two
Thailand-based construction companies were initially
engaged for the first phase of the project, which in turn
contracted a Chinese state company specialising in New
Energy, CTIEC Ltd. as EPC with its strategic PV partner
WEink Energy Ltd providing EPC management services.
As reported by PwC and the Myanmar Times, Synergy
Business Development Co. Ltd. (SBD) and its foreign
partner have submitted a proposal to the MOEE for the
construction of a 200 MWp solar power plant in Meiktila
Township, Mandalay (PwC Myanmar, 2018).
According to PV Magazine (PV Magazine Global, 2018),
Thailand-based Modern Energy Management (MEM) is
planning to develop a 130 MWp project in Myanmar. The
plant is expected to come online in Q4 2019. No further
details are known so far.
Mini-grid and off-grid solar projects
A large number of international development
organizations, banks and corporations are working on
various rural electrification projects in Myanmar.
2 MYANMAR ELECTRICITY MARKET / CONTINUED
FIGURE 12 LARGE-SCALE PV PROJECTS IN MYANMAR
PROJECT INSTALLED CAPACITY
(MWp)
LOCATION (REGION/STATE) REMARKS
Nabuai and Wandwin 300 Mandalay Region MOA (Memorandum of Association) & PPA
Minbu 220 Mandalay Region MOA & PPA
Shwe Myo 10 Nay Pyi Taw MOU (Memorandum of Understanding)
Sagaing and Mandalay 880 Sagaing and Mandalay region MOU
Thapaysan 100 Nay Pyi Taw MOU
SOURCE: PV Magazine, with reference to Myanmar Ministry of Electricity and Energy.

The German Society for International Cooperation (GIZ)
completed its project “Promoting Rural Electrification
in Myanmar”, which was commissioned by the German
Federal Ministry for Economic Cooperation and
Development (BMZ). The project, implemented during
2016-2018, also supported NEP and aimed at creating
policy framework and capacity building, especially in
the area of renewable energy-based mini-grids (GIZ).
Pact, a non-profit international organization with the
support of ABB, Chevron and Shell is working on
providing Myanmar’s local communities with solar
home systems and mini-grids (Pact, 2018).
Overall, the power sector accounted for 27.8% of
Foreign Direct Investment in Myanmar during the period
1988-2017 (US20.7 billion)(EuroCham Myanmar, 2017).
The UK has established a £15 million (30 billion Kyat)
fund that will be used until 2020 for carbon reduction
and renewable energies in ASEAN countries, including
Myanmar. The fund’s sources will also be directed on
conducting feasibility studies for wind and solar projects
(Myanmar Times, 2018).
FIGURE 13 PILOT PROJECTS WITH RENEWABLE ENERGY MINI-GRIDS
TOWNSHIP VILLAGE NUMBER OF
HOUSEHOLDS
POPULATION PV CAPACITY
(kW)
BATTERY
CAPACITY
(kWh)
TOTAL COST
(USD)
TYPE
MAGWAY REGION
Thayet Gon Ma Ni 197 931 7.2 57.6 73,350 Stand-alone
Sinbaungwe Kone Thar 270 2,170 8.7 63.3 82,368 Stand-alone
Minbu Pauk Lay Pin 89 336 4.9 57.6 44,100 Diesel hybrid
Yenangyaung Koke Ko Gwa 330 1,654 13.0 92.2 102,300 Stand-alone
Salin Kone Char 143 625 6.5 38.4 50,832 Stand-alone
Pauk Mone Kone 157 836 6.0 46.1 50,856 Stand-alone
MANDALAY REGION
Kyaukse Myin Chi Naing 317 925 10.8 86.4 98,580 Grid ready
Nyaung-U San Kan 200 977 9.8 115.2 75,000 Stand-alone
Kyaukpadaung Kyet Su Taw 103 484 4.9 57.6
87,980
Stand-alone
Taungtha Son Lun 110 654 4.9 57.6 Stand-alone
SAGAING REGION
Sagaing U Aing Kyun 170 569 6.0 46.1
102,770
Stand-alone
Khin-U Yauk Thit Kan 165 668 7.0 61.4 Stand-alone
In the framework of one of its power/infrastructure
development projects in the country, the Asian
Development Bank has installed solar mini-grid systems
in12villageslocatedintheDryZone(Magway,Mandalay
and Sagaing regions), and developed a geospatial plan
for off-grid renewable energy investment opportunities.
80% of installation costs were financed by ADB, the
remaining 20% was contributed by the villagers.
As mentioned in the ADB’s report (Asian Development
Bank, 2017), solar irradiance can go down by as much
as 50% in the rainy season, hence, areas with heavy and
prolonged rainy seasons may be less suitable for solar.
The International Finance Corporation (IFC) also
supports the Myanmar’s National Electrification Plan by
implementing its Lighting Myanmar program in the
country, which focuses on supplying local households
with solar lanterns, solar home systems and potentially
off-grid systems. The project was launched in 2016 and
is planned to be completed in 2022 (Lighting Global).
SOURCE: Developing Renewable Energy Mini-Grids in Myanmar.

3 RECOMMENDATIONS
FOR INTERNATIONAL INVESTORS
Compared to other ASEAN countries like Thailand,
Vietnam, and Indonesia and compared to the vast solar
potential of Myanmar – especially in the central region
wheredemandishigh–theamountofnewconstructions
of solar power plants is expected to be rather small in
Myanmar for the next ten years. Also, in terms of general
business conditions, Myanmar is not yet considered an
attractive country for foreign direct investments.
However, there is strong demand for electricity,
especially in rural areas, which might offer business
opportunities. Frequent power cuts also result in certain
demand for independent power production.
Still, there are no standard terms and conditions for
PPAs, therefore prospective investors should design a
bankable PPA. They should also envisage instruments
to hedge against currency risk, inflation and economic
volatility.
While there is currently no sufficient legal framework for
PV power plants, the government has announced to
issue regulations during 2019. Therefore, it is
recommended for investors to wait for the publication
of these rules before entering the market.
Among European organizations, the German Chamber
of Commerce Abroad (AHK) seems to have the best
insight into Myanmar’s solar PV market, so it might be
helpful to get in touch with them for further information.
FOR LOCAL PUBLIC DECISION-MAKERS
It is most important for Myanmar to re-evaluate the
current plan to increase electricity output mainly by
building coal-fired power stations. A careful analysis will
most likely show that the life-time cost for solar PV
power plants is more economical. In addition, solar
power can effectively counter-balance the electricity
shortage during the dry season, while not occupying too
much grid capacity during the rainy season.
The improvement of framework conditions for doing
business in solar PV would be another important step
to develop Myanmar´s potential. Currently the
prevalence of state-owned enterprises is limiting foreign
investment in the country. Tendering renewable energy
projects with non-discriminatory and transparent
allocation schemes – instead of signing bilateral
agreements – would support project developments and
attract investments.
Tenders are an important tool, since the heavily
subsidized tariffs in Myanmar are a main obstacle for
renewable energy developers to invest in projects which
compete with consumer prices.
It is fundamental to clarify the rules of engagement in
tenders. Tenders should be based on clear rules and
technical parameters on the nature of the projects such as
size, targets, location and timeline, in order to produce the
expectedoutcomesandtoattractparticipants.
The participation of free riders to the calls should be
discouraged: pre-qualification criteria such as bid bonds
in tendering should aim to attract only those actors able
to take responsibility for the projects. Selection criteria
should be designed in a way that a sufficient amount of
companies with experience in renewable energy will
participate in the tender.
The adoption of a PPA in the new regulatory framework
should follow international standards. This type of PPA
includes inflation, exchange rate and default risk of the
sovereign counterparts. Moreover, financial
development institutions should be part of the contract
providing financial guarantees for the counterparts.
The regulatory framework should also clarify and
simplify procedures for land access. Conflicts over land
titles and poorly established property rights are a main
concern for investors. In addition, the rules to get access
to the grid should be clear and transparent.
In general, the enforcement of contracts as well as the
protection of minority investors must be improved. This
is because potential investors might otherwise consider
Myanmar as a high-risk investment, which would cause
higher electricity prices.
FOR LOCAL PRIVATE STAKEHOLDERS
Capacity building and skills should be the focus of
stakeholders working locally to increase Myanmar’s
potential to attract investments in solar PV. Training and
skills could open up opportunities not only in the
operations, but also in local production of materials
appliedinPVprojects,e.g.mountingsystemsandfences.
Increased work opportunities, skills and know-how
transfer would also contribute to support renewable
energies’ deployment politically.
Assolarprojectsadvanceinthecountry,interestedparties
should seek partnerships with experienced counterparts
to ensure a socially sustainable value chain.

FOR DEVELOPMENT FINANCE INSTITUTIONS
The access to credit remains very poor, while state-
owned banks dominate the underdeveloped financial
sector. Therefore, multilateral development finance
institutions such as the World Bank and the Asian
Development Bank, as well as national development
banks such as the German KfW bank, are involved in the
energy sector of Myanmar. Their financial, technical and
governance support currently drives investments in
renewables and even the infrastructure to enable small
as well as utility scale solar power plants. Furthermore,
their presence reassures investors concerned by the
country’s macroeconomic fundamentals and
contributes to share best practices.
Project financing should be established for Myanmar’s
solar PV projects. The local banking sector has very
limited capital to provide financial services for projects.
Therefore, development finance institutions are key
players in Myanmar and should continue to assist the
development of a sustainable market for private
investments.Inthefuturetheyshouldsupportthemarket
with guarantees to attract foreign direct investment.
Development finance institutions’ long-term
commitment to the country contributes to providing
credibility to national policies and their country
strategies are taken into high consideration by
international investors. Technical assistance programs
and other forms of support from international
development organisations are key to improve the
energy access rate in the continent.
Thus, development finance institutions have a central
role to play in easing investment conditions for
renewable energies in Myanmar. Credit enhancement
mechanisms can play a central role in making
renewable electricity projects financially sustainable.
Commercial or sovereign-backed guarantees provide
the security that the energy produced and sold to the
national utility will be paid so that costs can be
recovered over the project’s long lifetime.

4 REFERENCES
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training/country-risk-map/country-page/myanmar

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Solar Investment Opportunities: Myanmar

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