What’s holding back Myanmar’s power sector growth?
The market’s installed capacity will remain marginal in the next decade.
Myanmar’s power sector is facing challenges linked to its increasing isolation from international communities and falling foreign investor interest, Fitch Solutions reported.
This is due to the disapproval of the international community to the military government and its coup in 2021.
“Myanmar has experienced major foreign companies ceasing operations and withdrawing from the market,” the report read.
“We highlight that government ministries and state-owned companies dominate the power market, making it difficult for foreign companies to disengage with the government if they are to continue their presence in Myanmar.”
Fitch added this has driven foreign companies to end existing operations in Myanmar to avoid dealing with the state-owned companies as well as ministries.
“The domestic power market also continues to face power supply disruption from attacks on transmission infrastructure, including the destruction of power lines connecting the Lawpita hydropower plant, and the boycotting of utility payments,” Fitch added.
“This has hampered the financial feasibility of power plant operators in the market, with the capital needed to repair power infrastructure amid low revenue gains. Against this backdrop, investor interest in new power developments is likely to remain extremely low.”