VZCZCXRO9327
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0815/01 2940805
ZNY CCCCC ZZH
O 200805Z OCT 08
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8299
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBY/AMEMBASSY CANBERRA 1589
RUEHBJ/AMEMBASSY BEIJING 2075
RUEHKA/AMEMBASSY DHAKA 5020
RUEHNE/AMEMBASSY NEW DELHI 5073
RUEHUL/AMEMBASSY SEOUL 8671
RUEHKO/AMEMBASSY TOKYO 6240
RUEHCN/AMCONSUL CHENGDU 1613
RUEHCHI/AMCONSUL CHIANG MAI 1887
RUEHCI/AMCONSUL KOLKATA 0461
RUEAIIA/CIA WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUEKJCS/DIA WASHDC
RUEHGV/USMISSION GENEVA 4090
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 2055
RUEHBS/USEU BRUSSELS C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000815 
 
SIPDIS 
 
STATE FOR EAP/MLS; INR/EAP; OES FOR JMIOTKE AND ACOVINGTON; 
EAP FOR JYAMAMOTO; EEB FOR TSAEGER 
PACOM FOR FPA; 
TREASURY FOR OASIA:SCHUN 
 
E.O. 12958: DECL: 10/20/2018 
TAGS:          
SUBJECT: DAMMING BURMA'S RIVERS 
 
REF: RANGOON 348 
 
RANGOON 00000815  001.2 OF 003 
 
 
Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4 
(b and d) 
 
Summary 
------- 
 
 1.  (C)  Burma suffers from an acute electricity shortage, 
producing less than half of nationwide demand, according to 
internal Ministry of Electric Power-1 (MEP-1) documents.  The 
GOB is turning to hydropower to make up at least part of the 
shortfall:  it is currently constructing 19 dams throughout 
the country in partnership with both local and foreign 
companies, and has signed MOUs for 20 additional projects. 
While joint venture agreements with foreign companies vary 
widely, the majority of contracts stipulate that the GOB will 
receive up to 25 percent of generated electricity and will 
either sell or provide the remaining power to foreign 
investors as compensation - meaning that much of the 
increased electricity production will flow outside Burma's 
borders.  End Summary. 
 
The Lights Go Out in Burma 
-------------------------- 
 
 2.  (SBU)  Burma's electricity supply is generated by a mix 
of gas/diesel dual-fired power plants, hydropower plants, 
steam turbine plans, and two coal-fired plants.  MEP-1 
distributes electricity through a national grid, which 
currently connects only half the country.  Burma has 26 power 
stations, 11 hydro stations, nine gas powered stations, and 
six steam turbine power stations.  There are 52 existing 
substations, which provide power to some of Burma's more 
remote locations. 
 
 3.  (SBU)  These generating plants fall well short of meeting 
Burma's domestic needs.  The country suffers from an acute 
power shortage, particularly during the dry season 
(November-May), when hydropower plants have less available 
water to produce electricity.  In 2007, Burma produced more 
than 6,200 megawatts of electricity a day, insufficient to 
meet nation-wide demand of 15,000 megawatts/day.  The 
Ministry of Electric Power-1 (MEP-1) used the majority of 
electricity to power Nay Pyi Taw, the only location in Burma 
that receives steady electricity 24 hours a day.  Burma's 
larger cities, including Rangoon, Mandalay, and Taunggyi, 
receive between six to eighteen hours a day, depending on the 
season.  The rest of the country receives far less; many 
rural areas have power less than four hours a day.  Many 
companies, schools, and hospitals rely on diesel generators 
for power; the Burmese people, particularly the poor, use 
candles or batteries.  According to Nay Linn, Executive 
Director of Genergy International (a private generator sales 
company), the generator business is booming. 
 
Damming Burma's Rivers 
---------------------- 
 
 4.  (SBU)  According to MEP-1, Burma currently has more than 
100 hydropower dams throughout the country, most of which are 
small or medium-sized.  Lawpitha Dam, located along the 
Salween River in Kachin State, is the largest dam in Burma, 
with an installed capacity of 190 megawatts/day.  The GOB 
estimates that an expansion of Burma's hydro resources could 
produce up to 40,000 megawatts/day, and it plans to improve 
hydropower capabilities over the next 20 years by 
constructing more than 250 hydroelectric projects along 
 
RANGOON 00000815  002.2 OF 003 
 
 
Burma's rivers (Ref A). 
 
 5.  (C)  According to internal MEP-1 documents, the GOB is 
currently partnering with local and foreign companies to 
construct 19 hydropower dams, with a capacity ranging between 
30 and 7,000 megawatts/day, along the Irrawaddy, Salween, and 
Chindwin Rivers.  The largest project is Tasang Dam, located 
in Shan State along the Salween River.  Upon completion it 
will be the largest dam in Southeast Asia, with an estimated 
installed capacity of 7,000 megawatts/day.  The majority of 
these projects, listed below, should come online by 2012, 
according to MEP-1 projections. 
 
--------------------------------------------- ------- 
          Burma's Current Dam Projects 
--------------------------------------------- ------- 
Name            Capacity    Location      Est. Date 
                              (MW) 
Completion 
--------------------------------------------- ------- 
Kabaung           30       Shan State         2009 
Kentaung          54       Shan State         2010 
Shweli           600       Shan State         2012 
Pathi              3       Shan State         2010 
Kun               60       Bago Div.          2012 
Phyu              40       Shan State         2012 
Kyauk Naga        75       Bago Div.          2012 
Yei Ywa          790       Mandalay Div.      2009 
That Htay        102       Irrawaddy Div.     2009 
Paungluang       140       Shan State         2009 
Tasang          7110       Shan State         2020 
Kyeion Kyee-wa    70       Magwe Div.         2008 
Lower Bu-ywa      41       Magwe Div.         2009 
Myogyi            30       Shan State         2009 
Manipura         340       Chin State         2010 
Thauk Yegat      140       Karen State        2011 
Nancho            40       Mandalay Div.      2009 
Thamanthi       1200       Chin State         2015 
Ann               15       Sagaing Div.       2009 
--------------------------------------------- ------- 
 
 6.  (C)  According to MEP-1, the GOB has received pledged and 
actual foreign direct investment (FDI) for all of the 
above-mentioned projects, although actual figures are not 
available to us.  The majority of funding comes from Thai and 
Chinese companies, although Japanese and Indian companies are 
also involved in several hydropower projects. 
 
 7.  (C)  In addition to these dam projects, MEP-1 has signed 
MOUs and joint venture agreements with local and foreign 
companies to construct more than 20 additional hydropower 
dams in the next 20 years.  According to MEP-1, more than 15 
Chinese companies, including China Gezhouba Group Col, 
Sinohydro, China International Trust and Investment Col, 
China National Heavy Machinery Col, and the Yunan Power Grid 
Co., have signed hydropower contracts with the regime in the 
past three years.  The regime-controlled New Light of Myanmar 
reported that in the last two months, MEP-1 signed a joint 
venture with Indian-owned National Hydroelectric Power Corp. 
(NHPC) for the Thamanthi and Shwesayay Dams; with Singapore's 
Windfall Energy Services Ltd. and Thailand's Italian-Thai 
Development Public Co. for the Taninthayi hydropower project; 
and with China Datang Corp. for the exploration and 
development of the Day Pein 1 and 2 dams. 
 
High Cost of Joint Ventures 
--------------------------- 
 
 
RANGOON 00000815  003.2 OF 003 
 
 
 8.  (C)  Although the Burmese Government claims that all of 
the electricity generated by these dams will be used 
domestically, the joint venture contracts signed with foreign 
companies, primarily from China and Thailand, alXD'QUQ'!Oet"o export the majority of electricity produced 
as compensation for their investment.  According to Kyaw Win 
Aung, an executive engineer on the Yei Ywa dam project in 
Mandalay, the GOB will receive up to 25 percent of power 
generated by the new plant.  The Chinese investors in the Yei 
Ywa project -- China Heavy Machinery Corp. (CHMC), China 
Datang Corp. (CDGC), China Gezhouba Group, and Sinohydro, 
among others - are taking the lead on the majority of the 
construction, working with several Burmese companies.  Kyaw 
Win Aung informed us that the Chinese firms will be paid in 
kind, taking control of up to 75 percent of electricity 
produced, which they can either sell to the GOB or send to 
China via newly-constructed power lines (septel). 
 
 9.  (C)  According to Yangon City Electricity Supply Board 
Secretary Lt. Colonel Maung Maung Latt (Rtd.), some joint 
venture agreements require the foreign company to pay for a 
certain amount of electricity that they receive as part of 
the arrangement with the GOB, but at below-market prices. 
Burmese companies that partner with MEP-1 to build dams, such 
as Steven Law's Asia World, are often paid in-kind, often 
with high-value import permits, Glenn Ford, Acting Director 
of Myanmar Ivanhoe Copper Co. Ltd., told us. 
 
Comment 
------- 
 
 10.  (C)  Burma's ambitious hydropower expansion, if seen 
through to completion, will significantly increase domestic 
power production - though the overall installed capacities 
for the new dams are likely grossly overestimated, since 
Burma's hydropower stations typically only produce during the 
rainy season.  If recent patterns of lower annual rainfall 
continue, actual output will be lower still.  As is typical 
in other infrastructure projects - whether implemented by 
domestic or foreign firms - the GOB provides payment in kind 
rather than cash, which in this case means access to the 
majority of the power generated by the new plants.  Firms are 
expected to give or sell their share - representing perhaps 
75 percent of the total produced - to Burma's neighbors, 
meaning the Burmese people will see only a fractional benefit 
from the overall expansion in power production capacity. 
 
VAJDA