Preliminary Regulatory and Legal Frameworks for Myanmars Power sector

27 January 2014

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Outline
1. 2. 3. 4. 5. 6. 7. On-Grid Power Distribution Structure Electricity Law Enacted in 1984 Private Participation Power Purchase Competition Basic Steps to Develop Power Project in Myanmar Key Governmental Authorities for Power Project Development 8. Key Project Documents 9. Q&A

1. On-Grid Power Distribution Structure

Ministry of Electric Power Own generation Myanmar Electric Power Enterprise Own generation For further distribution Own generation Electricity Supply Enterprise IPP

Yangon City Electric Supply Board

End Users in Yangon Area

End Users in Other Areas

2. Electricity Law Enacted in 1984

The Union Government (cabinet)s permission is necessary to carry out the following activities: (a) Exploration of resources for electricity generation (b)Generation of electricity (c) Transmission of electricity (d)Distribution of electricity To the following organization and individuals (a) State-owned Utilities (b)State-owned Industries (c) Legal Cooperative Groups (d)Legal Private Organizations (e) Other Organization

3. Private Participation
Private participation in electricity generation sector is already allowed, but it is essential to get the permission from the government as required by Electricity Law and State-owned Enterprise Law
Application will be submitted to cabinet meeting during the process of the consideration for the approval of the Myanmar Investment Commission Local investors are allowed to participate in the scheme of independent power producer (IPP)

4. Power Purchase
Not stated specifically in Electricity Law
It is a normal practice between Ministries and among the state-owned organizations to obtain the approval of the Union Government According to the Board of Yangon City Electric Power Supply Law, YESB can purchase electricity at the price approved by the Ministry.

Nowadays, only small scale power project has been approved to sell abroad.

5. Changes in Laws and Regulations

Policy of Myanmar Power Sector is changing gradually towards privatization.

The current system mostly applying to the electricity generation industry is Build-Operate-Transfer (BOT) system.
With the cooperation of Asian Development Bank and the Government of Norway, Myanmar government considers to revise and amend the legislation in relation to the electricity industry.

6. Basic Steps to Develop Power Project in Myanmar

1. Permit under Foreign Investment Law is necessary for foreign investor who would like to invest in power project due to privileges available in such law. 2. To obtain such permit, the investor needs to obtain the approval of the government through the Ministry of Electric Power (MOEP) and conduct EIA and SIA. The Government may require a joint venture investment between state-owned enterprise or local company and the foreign investor based on case-by-case basis.

3. Signing MOU and MOA is the practice that Ministry of Electric Power requires as the conditions before entering into BOT agreement (formerly known as Joint-Venture Agreement)

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6. Basic Steps to Develop Power Project in Myanmar (Cont.)

4. Relevant parties need to negotiate the draft of relevant agreements (e.g. joint-venture agreement, BOT agreement, loan agreement etc.) and submit the final draft thereof altogether with MIC permit application for consideration of MIC.

5. MIC application and relevant agreements will also be considered by the Attorney-General's office and other relevant departments notwithstanding the government participation in the project.
6. The Government will consider the opinion provided by relevant ministries, especially Ministry of Electric Power, before granting the approval of power project. 7. MIC will decide to provide the privileges to the project based on the opinions provided by the relevant ministries.

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7. Key Governmental Authorities for Power Project Development

Ministry of Electric Power (MOEP) which is the regulator for transmission system and IPP Ministry of Energy (in case of petroleum fuel-fired power plant) Ministry of Industry (in case of solar power plant) Ministry of Mines (in case of domestic coal-fired power plant) Myanmar Investment Commission (MIC) Ministry of National Planning and Development Ministry of Environment Conservation and Forestry Myanmar Electric Power Enterprise (MEPE) Electricity Supply Enterprise (ESE) Yangon City Electricity Supply Board (YESB) Local Governments (e.g. State Government)

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8. Key Project Documents Joint Venture Agreement BOT Agreement Power Purchase Agreement Gas Supply Agreement EPC Contract O&M Agreement

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Q&A

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THANK YOU